WestBridge may infuse Rs 900 crore in Vini Cosmetics – Economic Times
The deal is expected to value serial entrepreneur Darshan Patel‘s company at about Rs 4,000 crore, they said. At that valuation, WestBridge will get a 22.5% stake in what could be the largest investment in a privately held FMCG player in India.
The contours of the deal are still being finalised, the people said. Some early investors in the Ahmedabad-based company, like Bay Capital and former IDFC Securities analyst Nikhil Vora, are likely to exit the company through the deal. Sequoia Capital is another investor in Vini Cosmetics.
“The term sheet is in and the due diligence is going on right now. The transaction could make WestBridge the largest shareholder in Vini after the promoters,” said one of the people. The deal, if successful, will take at least twothree months to close.The initial transaction will involve an investment of $60-70 million (Rs 385-450 crore). Of this, $40-50 million will be to purchase new shares in Vini Cosmetics and the rest to buy stake from the early investors.
The two parties are also discussing a potential investment in sanitary napkin maker Soothe Healthcare, where Patel owns an about 65% stake in his personal capacity.
Soothe makes sanitary napkins under the Paree brand and counts ace badminton player Saina Nehwal as a brand ambassador and investor.
“We are in talks with four to five players, but it’s not finalised yet,” Patel said when contacted by ET. He said he has been talking to various potential investors for the past eight months, but can’t say with whom a deal will be finalised and how much time it will take. WestBridge managing director Sandeep Singhal did not respond to an email seeking comment.
WestBridge Capital manages a corpus of more than $1.55 billion and has backed a number of listed consumer companies like footwear maker Relaxo, snacks maker DFM Foods and tableware and kitchenware maker La Opala. In the private market, it has invested in housing finance player Aptus, small business lender Vistaar and big data startup Innovaccer.
LEADING THE PACK
The transaction comes at a time when Patel could be looking to script a broader consumer play for Vini, which has built a market leadership position in the deodorant space since its launch in 2011.
Fogg has been able to corner an about 20% share in the deodorant market in India, according to a report earlier this year by Euromonitor, ahead of Hindustan Unilever’s Axe, ITC’s Engage and Marico’s Set Wet.
“Deodorant is a promotion-heavy segment and Vini has a good understanding of that category.
They have been able to sustain their market leadership in the segment even as the position of other companies has kept changing,” said Abneesh Roy, senior vicepresident at Edelweiss Securities. The deodorant market has nearly tripled to Rs 3,130 crore between 2011 and 2016, according to Euromonitor.
Besides Fogg, Vini has also launched products like White Tone (face powder), Glam Up (powder cream) and Ossum (women’s perfume). Some of the new categories Patel has been eyeing include hair care and skin care. Patel is one of three brothers who started Paras Pharmaceuticals, which had over the counter brands like Itch-Guard, Krack and Moov besides personal care brands like Livon and SetWet. He exited Paras by selling his stake to private equity firm Actis for less than Rs 200 crore in 2006 and started Vini in 2009.
In 2010, British consumer goods giant Reckitt Benckiser acquired Paras for 3,260 crore in what was the largest deals in India’s FMCG space. In 2012, homegrown FMCG company Marico bought Paras’ personal care business from Reckitt.