Consumer-focused investment firm L Catterton, which is in the process of raising its first India-focused fund and deploying the proceeds, is doubling down on India with the prospects of a larger fund in the future.
Of $400 million targeted corpus, the private equity firm has already raised $200 million and deployed roughly half of that. The remainder will be raised over the next year and half, with the option to raise an additional $200 million.
So far it has invested in snacks brands Farmley and Haldiram’s and healthcare firm Healing Hands Clinic. The investments have been, on an average, made at 20-40 per cent discount to comparable transactions, said L Catterton India’s Partner and Co-head Vikram Kumaraswamy.
He pointed out that its investments were proprietary deals, either from the onset or from a relatively early stage of a formal company-led or intermediary-brokered fundraising process enabling it to get deals on favourable terms.
L Catterton’s proposition was not just bringing in capital but also building up the capabilities of the investee companies, said Sanjiv Mehta, Executive Chairman of L Catterton India. “India is going to be the largest consumer story for many years to come,” he added.
Drools, a pet food brand in which it has invested previously through its Asia fund, has reached a stage where it could go public, while Haldiram’s was also on the way for a public listing, said Kumaraswamy, though he declined to give specific timelines for this.
Sales to strategic investors have been a preferable exit option for the firm globally.
The India portfolio companies’ revenue have increased on an average by around 25 per cent and while EBITDA margins expanded by 600 bps over the past year.
The firm has also invested in Jio Platforms, holding around 0.4 per cent stake, and is learnt to be exploring the option of offloading its stake in Jio’s initial public offer expected later this year.