Name switch costs Bira Rs 80 crore, deepens losses ahead of planned IPO

B9 Beverages Ltd., the maker of Bira 91 beer, lost Rs 80 crore in product write-offs after a seemingly simple name change caused months of disruption in the Indian market, according to media reports. 

Previously known as B9 Beverages Private Ltd., the company dropped “Private” to position itself for a 2026 initial public offering. However, the decision led to prolonged compliance hurdles that halted sales, driving a 22% decline in revenue for the fiscal year ending March 2024.

What did the founder say?

“Due to the name change, there was a 4-6 month cycle where we had to re-register labels and re-apply across states which resulted in literally no sales for several months despite demand for our products,” founder Ankur Jain said in a statement.

“While availability dwindled, we also saw policy and route to market changes in Delhi NCR and Andhra Pradesh, which accounts for more than a third of our sales.”

As a result, B9 Beverages reported net losses of Rs 748 crore in FY24 — an increase of 68% from the previous fiscal year — surpassing total sales of Rs 638 crore. Sales volumes for its flagship brand, Bira, dropped to six or seven million cases from nine million a year earlier. The company said the inventory written off amounted to Rs 80 crore in unsold goods bearing the old company name.

Expecting business to rebound

Despite the setbacks, management expects business to rebound. “We had to write off Rs 80 crore worth of products due to the name change which amounted to Rs 80 crore one-time cost, directly impacting our profitability. However, growth is back since the third quarter, and we expect to make operating profit by next quarter and have enough scale and size to raise capital by 2026,” Jain said.

According to the reports, Indian beer consumers are seeing more variety than ever, thanks to the rise of microbreweries, craft brands like Simba and BeeYoung, and foreign brewers launching premium offerings.

Vinod Giri, director general of the Brewers Association of India (BAI), said smaller labels such as Bira “complement the mainstream beer industry” by catering to new palates and encouraging experimentation. However, he cautioned that rapid expansion can dilute a craft brewer’s unique appeal.

“They must follow a business model which balances investor expectations of quick returns with the rate of consumer accretion that the point of difference in the product naturally permits,” Giri said.

Expanding partnerships

Founded by Jain in 2015, Bira initially imported its Hefeweizen-style beer from Belgium before transitioning to domestic brewing to cut costs. The brand has since expanded via partnerships with third-party breweries, but recent months have shown the market’s competitiveness.

United Breweries, owned by global giant Heineken, announced Friday it will invest ₹750 crore in a new Uttar Pradesh brewery, its first greenfield project in a decade. Danish brewer Carlsberg, likewise, said it aims to increase investments in India in 2025.

For B9 Beverages, the slipup caused by a name change has cost it financially—and perhaps in market share—at a time when more consumers are seeking craft alternatives to mainstream labels.