FDC Ltd could raise Rs 1200 by selling its shares in minority

Mumbai-based pharmaceutical company FDC Ltd is the best-selling non-prescription drug brand by leveraging the overwhelming investor interest in pharmaceutical and healthcare companies to dilute significant minority interests. Is split into another entity and is trying to raise up to 1,200 rupees.

Development-savvy people told ET that the major brands brought under the new entity include the market-leading ORS brand Electral and the energy drink Enerzal. Over-the-counter (OTC) business revenue is around Rs. 30 billion and is estimated to be worth Rs. 250 billion.

In addition to private equity funds such as Chrys Capital and Warburg Pincus, feelers have been sent to large FMCG companies such as Hindustan Unilever, P & G and Zydus Wellness. According to one of the sources above, management may sell the brand entirely or sell the controlling stock, depending on the valuation provided.

PricewaterhouseCoopers India is working with the company to split and create related new units.

Electral, the best-selling oral rehydration salt (ORS) brand, has an approximately 72% share of the Indian antidiarrhea market. Electral’s market share increased from 68% in FY19 to 72% in FY20. Electral made about 230 rupees in 2008, one source said.

“The FDC promoter wanted to maintain a majority stake in this proposed split entity and expand its business through the strong distribution channels of FMCG majors in India,” said one source. I am. He added that the immediate plan is to dilute a stake of about 49%. However, promoters also wanted to explore opportunities with PE investors.

FDC, Warburg Pincus, HUL and Chrys Capital declined to comment, but emails sent to P & G and Zydus Wellness remained unanswered.

“Enerzal and Electral have established themselves as wellness brands and are increasingly being purchased as off-the-shelf products by consumers. Recognizing that as health awareness grows, there is ample room for further growth of these brands However, the company is investing in strengthening brand awareness and customer engagement. “Mohan A. Chandavarkar, Managing Director of FDC, said in the company’s 20-year annual report.

FDC Ltd was founded in 1936. Has a strong presence in the oral rehydration salt (ORS) and ophthalmology sector in India. The company has a strong presence in therapeutic areas such as anti-infectives, anti-diabetes, heart, dietary supplements, gastrointestinal, gynecological and respiratory.

In addition to Electral and Enerzal, the major brands of FDC in India include antibiotic tablets Zifi, Zathrin and Zipod. Vitocofol (iron tablets), Pyrimon eye drops, Zocon (antifungal tablets), skin cream cotalyl, preservative Mycorderm.

Through multiple acquisitions, HUL has expanded its presence in the healthcare consumer sector in India.

In India, HUL sells the best-selling OTC and oral health products such as Eno, Crocin, Otrivin and Sensodyne since the merger with GlaxoSmithKline Consumer Healthcare last year.

After the merger, HUL also owned blockbuster brands such as Horlicks, Boost and Maltova. Last year, HUL acquired VWash, a market leader in the intimate hygiene category for women, from Glenmark Pharmaceuticals.

Similarly, P & G has expanded its footsteps in India’s consumer health business through the acquisition of Merck Ltd, which owns the best-selling vitamin brands Neurobion, Polybion and Evion. P & G also sells top-brand cod liver oil capsules Seven Seas, nasal congestion remover Nasivion, and iron supplement Livogen.

KPMG wrote in February that the Indian healthcare market will reach $ 372 billion by 2022 due to increased awareness of healthcare, increased income, increased access to insurance and increased frequency of lifestyle-related diseases. Expected to reach. The Indian government said it aims to increase medical costs to 2.5% of GDP by 2025.

In recent years, the consumer healthcare business has been in the limelight, primarily due to increased access to technology and awareness of healthcare. In 2019, Zydus Wellness acquired Kraft Heinz’s consumer brand business in India, including Complan. India News Republic