Alagh set for second innings in FMCG

Warburg Pincus to fund acquisition of firm.

Backed by Warburg Pincus, Sunil Alagh, the former CEO of Britannia Industries, is eyeing a buyout in the Indian fast-moving consumer goods (FMCG) market.

"Global equity investment firm Warburg Pincus has agreed to fund the acquisition, which I will be heading," Alagh today told Business Standard.

When asked about the size of the acquisition, Alagh said Warburg Pincus had not set a ceiling. Alagh said he had not shortlisted any segment of the FMCG market.

"We are looking at the entire range of companies in the FMCG market where my expertise lies. We are currently in talks with a few of them," he said.

Warburg Pincus functionaries in Mumbai could not be reached for their comments.

Since his exit from Britannia, Alagh has floated his own consulting firm SKA Advisors and has been actively advising clients in their marketing strategies.

His clientele includes cigarette manufacturer Godfrey Phillips, biotech firm Biocon and the Mumbai-based Sarada Group. His is also the president of the All India Management Association. The proposed buyout will mark his return to the mainstream FMCG market.

The Indian FMCG market is estimated at close to Rs 48,000 crore, with the foods category accounting for close to Rs 30,000 crore. Home and personal care products contribute the rest.

In the foods category, biscuits and baked products is a Rs 4,000 crore category and it has been growing at a rather meagre 5-6 per cent. Branded products account for nearly Rs 2,500 crore of this market.

For Warburg, this would be the latest in a string of high-profile investments in India. These include Rediff, Indiamarkets.com, Ambuja Cement, Nicholas Piramal India Ltd, HDFC, Radhakrishna Foodland ($75 million) and Bharti Enterprises.

Between September 1999 and July 2001, it invested $292 million to finance Bharti's growth through acquisitions and expansion of existing properties.

Warburg Pincus has invested more than $18 billion in approximately 490 companies in 30 countries. It is one of the leading private equity firms in Asia, having invested more than $1.5 billion in the region.