United Spirit's first quarter results this week might have one wondering what all the fuss is about with the current economic downturn.

The company, which is owned by Indian entrepreneur Vijay Mallya's UB Group, reported strong rises in sales and profits for its fiscal first-quarter yesterday (30 July), proving that the Indian spirits market has seen little of the fallout from the global economic meltdown.

Net sales for the three months to the end of June rose by 22% to INR12.4bn (US$256m), while net profits rose by 52% to INR1.77bn, compared to the same period of last year.

The world's third-largest spirits producer also announced plans this week to raise a further US$300m to pay down debts within the next two to three months. Mallya told US television channel CNBC TV18 that the company was exploring various options including a placement to institutions and a possible stake sale.

"There are two private equity investors, world class investors, who are extremely keen and we are working with them," he said. "So going forward in the next 60-90 days you'll probably see the next tranche of fundraising to pare down the debt even further."

Mallya said the debt payments would "significantly lower" interest costs going forward.

In addition, a source close to the company confirmed to just-drinks last month the existence of the offers from two private equity groups to invest in the firm. The source also said that the well-documented talks with Diageo over a potential stake sale are ongoing.

India's Economic Times newspaper named the interested private equity groups as Kohlberg Kravis Roberts, Blackstone Group and Capital International.

In June, United Spirits (USL) raised about $185m by selling stock it had on its balance sheet and used the proceeds to pay back debt. The company's debt was more than INR70bn before this repayment, but it is targeting a reduction to around IRN40bn.

The debt was accrued in 2007 with USL's acquisition of Glasgow-based Scotch maker Whyte & Mackay for around GBP600m (US$1.18bn). The unit took on debt to fund the acquisition and the company has since reportedly begun looking to make a stake sale to help repay this debt.

USL's CFO, Ravi Nedungadi, has said that the company is open to selling a stake in its recently-bought prize. "We have not taken a decision on that," he told Trading Markets. "[However] we will not be averse if somebody comes with a proposal to us."

Earlier this week, the company announced that Shaw Wallace, which merged with USL in January, will sell its entire 10.27% stake in USL to help with debt. In a filing to the Bombay Stock Exchange, USL said that Shaw Wallace & Company intends to sell 10.3m shares, bringing the deal value to around INR9.43bn.

With India now the second-biggest market for Ciroc, Diageo's "superluxury" vodka, it's little wonder the drinks giant wants a larger slice of the country's spirits market. Its Johnnie Walker Black Label whisky is also an iconic brand in India, the company's Asia-Pacific president John Pollaers has been quoted as saying.

Mallya said yesterday, upon the release of USL's positive first-quarter results, that the number of young consumers reaching legal drinking age in India has sustained growth.

United Spirits' managing director, Vijay Rekhi, has said that Indian consumers have only recently embraced labels, and that per capita consumption of spirits in the country has risen. Last year, it stood at 2.3 litres, compared to 0.3 litres in 2003, according to the World Health Organisation.

"Brand consciousness amongst consumers has finally permeated into the spirits category as well," Rekhi said.

India is certainly one emerging market that doesn't appear to have lost its shine, confirmed by Mallya's continued positivity about the group's outlook.

"The brands are very buoyant," he told CNBC. "I have no difficulty in saying that I feel very confident that our robust growth will continue. The brand power is there, all the market initiatives and the absolute commitment of building brand equity over the last 25 years I think is paying off and will stand us in good stead going forward. And with the control on input costs, and achieving the right kind of product mix, we are in good shape."