ChrysCapital sells CavinKare stake

The promoters of CavinKare Pvt. Ltd., a fast-moving consumer goods company, have bought out the entire holding that ChrysCapital — a home-grown private equity firm — held in the company, for an undisclosed sum.

ChrysCapital had invested ₹250 crore in CavinKare in 2013.

The investment, sources said, had delivered a return of a little more than two times in less than four years for ChrysCapital.

With this, CavinKare will be fully owned by its promoters led by its chairman and managing director C.K. Ranganathan.

“By providing ChrysCapital the exit option, I have effectively consolidated my ownership to 100% in the company,” he said.

Mr. Ranganathan said the buy-out would give the promoters a lot of leeway and options to restructure the organisation, which currently produced personal care and food products.

He, however, made it clear that any revamp could be considered only after a careful study of various possibilities. To a question, he said that CavinKare would consider assorted funding options going forward once the reorganisation was carried out.

Focus on results

To a question, he merely said ChrysCapital was given the option at the time of its entry to go up to a maximum of 14% equity holding in the company.

CavinKare roped in ChrysCapital in 2013 to bring in a greater degree of dynamism and progressiveness into the company. The investment came at a time when the company was looking to further strengthen its focus on the strategic direction and results.

The buy-out by CavinKare’s promoter marks ChrysCapital’s first full exit for its sixth Fund, which entered its harvesting phase. The ₹1,350-crore FMCG company started its journey with the iconic Chik Shampoo brand in the 1980s. Occupying the top third position in the hair wash and hair colour market, the company has several ₹100 crore brands in the hair care space, including household names such as Chik, Indica and Meera.

“At a time when growth in the personal care space has been muted for most companies, CavinKare has enjoyed a strong growth of 15% during the last few quarters,” said a statement from the company. “During the last decade, CavinKare has successfully transformed itself from a pure personal care player to a FMCG conglomerate with interests in the dairy, snacks, food and beverages businesses,” it said.

ChrysCapital, it may be recalled, has raised its seventh fund accumulating $600 million from investors such as Government of Singapore Investment Corporation (GIC) and Harvard Management Company.

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Printable version | May 28, 2022 7:38:56 pm |