Jyothy Labs readies war chest for acquisitions

Raises Rs 263 cr via preferential allotment of shares to promoter group company

Mumbai-based consumer goods company Jyothy Laboratories was preparing to make a fresh round of acquisitions in fabric care and personal care by the fourth quarter of the current financial year or early the next, Joint Managing Director Ullas Kamath said.

The maker of Ujala fabric whitener, which last acquired Henkel India in 2011, has raised Rs 263 crore via a preferential allotment of shares to a promoter group company, Sahayadri Agencies.

This, with the internal accruals of Rs 220-250 crore, was expected to be deployed for making largely regional acquisitions, Kamath said in a telephonic conversation. With this, the promoter holding in the Rs 1,106-crore company would increase from 63.69 per cent to 66.7 per cent, he said.

Kamath, however, declined to specify the targets, but said he was in touch with merchant bankers.

"The Henkel acquisition, integration and merger are behind us now. We have a new management team in place for a year now, looking after the day-to-day operations of Jyothy. We can look at the next phase of growth," Kamath said. "Besides inorganic, some amount raised will also go towards organic growth." The current fund-raising is the second such by Jyothy in a month. In November, Jyothy had raised Rs 400 crore via non- convertible debentures to a clutch of investors.

"We expect to close the current fiscal with a topline of about Rs 1,350-1,375 crore. This would mean a growth rate of about 25-30 per cent over the previous year," Kamath said. "Acquisitions in the regional space would obviously bolster our portfolio of brands. We are targeting those products that have the potential to be taken national. This way we can help improve turnover as well," he said.

Jyothy at the moment has seven core brands including flagship Ujala, which has a turnover of around Rs 350 crore, followed  by Exo dishwasher at Rs 280 crore, Maxo coils and liquids at Rs 200 crore, Henko detergent at Rs 145 core, Margo soaps at Rs 135 crore, Pril surface cleaner at around Rs 80 crore and Fa range of deodorants at around Rs 25 crore.

New acquisitions in fabric care and personal care will mean that the segments are expected to be the key ones for the company in the coming quarters. Kamath says that household insecticides and surface cleaners while important categories has no good targets for acquisitions. "We will continue to focus our attention on all four segments, but from an acquisition point of view, it makes perfect sense to look at  fabric care and personal care," he adds.