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Super Vasmol to be sold, Founders eye up to ₹1,800 cr

Super Vasmol to be sold, Founders eye up to ₹1,800 cr

MUMBAI: Leading personal care companies Godrej Consumer Products Ltd,




, Dabur and


have been tapped as the founding family behind Super Vasmol hair colour has decided to sell its flagship brand for ₹1,500 -1,800 crore, said people in the know.

The transaction would give an exit to PremjiInvest that in 2015 invested ₹216 crore for around a third of Hygenic Research Institute Pvt Ltd, the company behind the 63-year old brand.

The monetisation exercise would also unlock value for the founders – the Chhabra family – who want to continue running the profitable company as well as Streax brands of hair colour products.

Citi has been mandated with the sale process.

However, these discussions are preliminary in nature.

Hygenic Research chief executive Manish Chabbra declined to comment. Messages to PremjiInvest did not generate a response till press time on Sunday.

Mails sent to Dabur, Godrej, Marico, Emami and HUL also did not generate a response.

“Even consumer-focussed buyout funds will be tapped. The flagship brand is likely to get demerged into a separate vehicle from a tax efficiency point of view. The deal contours are being worked out but it would entail a structure wherein some of the sale consideration will be used to pay off PremjiInvest,” said an official in the know on condition of anonymity as the talks are in private domain.

The company was founded in 1950 by late SS Nishat. Over the years, it has built brands such as Super Vasmol 33, Keshkala, Vasmol Kali Mehendi, Super Vasmol Aamla Herbal Powder Hair Dyes, Vasmol Shaving Cream, Streax Hair Colour, Streax Pro and Streax Euro range of professional products, Yogiraj Thanda Tel, Florozone range of skincare products and Silkiss Shampoo range.

Hygienic has five manufacturing plants in India, at Mumbai, Baddi and Guwahati.

The company has a direct pan India retail distribution network of over 4 lakh outlets and aims to grow it by 25% on-year to reach ₹1,000 crore topline by 2020. In the salon or the professional channel, its products are currently sold in 25,000-30,000 outlets directly and the company aims to grow them to about 50,000 in the next two years.

Trade analysts claim, Super Vasmol has a strong market share in east and south, and any company that has plans to deepen its presence in the two markets is likely to make a play. It also has retail presence in the hair-care segment in Bangladesh, where it competes with Marico, and Nepal, and its products are exported to about 20 countries. In FY20, the company is expected to clock ₹600 crore in topline with a 65-70% high gross margin and EBITDA margins of 35-40%. Super Vasmol with its brand extentions alone contribute close to half of the company’s revenues.

Even in the past, players like Godrej, Marico and Dabur had made overtures to buy the company or its brands but till date the family had resisted. PremjiInvest was the first external investor.

The Indian hair care industry has evolved to a $3.3-billion, or about ₹23,600-crore, market, with growth rate of about 10%, according to a 2019 report by Nielsen. New-age segments are growing faster.

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