Investors flag operating issues as Bira 91 eyes fresh capital

Investors of craft beer maker Bira 91 have raised concerns about capital burn rate and operating performance, even as the company looks to raise fresh rounds to augment growth and start production.

- AKSHARA SRIVASTAVA

“There has been a promise to deliver, which has not been met in terms of operating performance and revenue scale. The company has been struggling with liquidity. It’s not just about name change, it had operating challenges — both in terms of working capital and managing business — across different states for a while,” an investor told Business Standard.

While the company has raised several rounds of capital, “the burn rate is also very high and without working capital, the engine cannot work. It has been struggling with capital for the last 12-18 months. But when one has pending liabilities, the capital also gets washed out quickly,” the investor added.

Meanwhile, another investor pointed out operating issues at the company, including a less-than-desirable length and breadth of distribution and an international foray “that in hindsight, was too early.”

According to data from Tracxn, institutional investors hold 28.6 per cent stake in the company. It is led by PeakXV, Sofina, Sixth Sense, MUFG and Tiger Pacific. Kirin Holdings holds another 20.3 percent.

In 2017, the craft beer maker had announced plans to start distribution in at least five international markets within two years of being founded.