- Vini Cosmetics’ current valuation raises to ₹ 6500 crores
- Fogg deodorants account for almost 80% of company sales
- Fogg remains the top market leader with an 18% share in a ₹ 3,047 crore deodorant segment nationally
Homegrown private equity firm WestBridge Capital is in serious discussions to take the majority control of Vini Cosmetics at a valuation of about ₹ 6,500 crores. WestBridge had earlier invested in Ahmedabad-based consumer goods company and Fogg (Friend Of Good Guys) deodorant maker two years ago.
The India-focussed fund plans to pick up an additional 30% stake in the company from early investors Sequoia Capital and the promoter group for around ₹2,000 crore. Sequoia will likely be taking a complete exit while the promoters are set to sell about 15% of their stake. WestBridge will be ending up with a slightly over 50% shareholding in the Darshan Patel-founded company after the deal.
Vini was earlier valued at ₹4,000 crore in 2017, when it last raised capital from WestBridge, which has invested in Star Health Insurance and diagnostics chain Dr. Lal PathLabs, among others. The process is in transit and is likely to conclude in a month’s time.
Patel co-founded Vini with his younger brother Dipam Patel in 2009 and they together do own more than 60% in the company. Sequoia holds 17% where WestBridge holds a 20% stake. WestBridge wants to build Vini into a larger consumer goods company by acquiring brands and possibly tapping the public markets later.
Last year, WestBridge bought Star Health Insurance as part of a consortium. Now, taking majority control of Vini will be a big bet on the India consumer story, where new brands in the value segment have grown potentially in recent times.
Vini’s turnover flew 20% to about ₹ 1,000 crores in FY19. Fogg deodorants account for almost 80% of company sales, which include brands such as facial powder White Tone and facial cream Glam Up. Fogg remains the top market leader with an 18% share in a ₹ 3,047 crore deodorant segment nationally, followed by ITC’s Engage at 11%.
Silicon Valley venture fund Sequoia is expected to snag a good return on its early investment in Vini, which it first backed in 2013 at a valuation of about ₹ 850 crores. Sequoia had ploughed in $48 million through its India and global fund over the past six years. Bay Capital took home ₹ 500 crores when West-Bridge came on board two years ago, having put in ₹ 30 crores in 2011.
Patel, who has been the CEO of the company, may step down and take a non-executive role, one person said. Patel has been credited with building consumer brands such as Moov, Livon, Itch Guard, Set Wet, Krack and Dermicool at his family-owned business Paras Pharmaceuticals, which was sold to Reckitt Benckiser in 2010.
PE majors are increasingly pushing to acquire control of companies in India as they look to drive strategy and corporate governance in growth-stage entities with the potential to scale up as promoters start to warm up to this kind of an arrangement.