Goodknight biz has implied value of around Rs 30,000 cr: GCPL chairperson

The implied value of Goodknight business based on the current market capitalisation of Godrej Consumer Products Ltd (GCPL) is around Rs 30,000 crore, which was bought by the group's FMCG arm in just Rs 100 crore in 1994, the company said in its latest annual report.
 

Godrej Group had bought the Goodknight brand in just Rs 100 crore in 1994. A year later in 1995, it sold a 51 per cent stake in Goodknight to Sara Lee and started a joint venture with the US-based consumer goods company.
 

Later in 2010, GCPL acquired Sara Lee's 51 per cent stake for Rs 1,240 crore and merged the business into the company.
 

"We went on to invest in and grow our household insecticides business over the decades. It was a separate business from GCPL till 2010 when we acquired Sara Lee's stake and merged the business into GCPL," said GCPL chairperson Nisaba Godrej addressing shareholders of the company.

She further added: "We believe this business has an implied value of around Rs 30,000 crore today, based on the current GCPL market cap, with an underlying 30 per cent CAGR on value creation.

GCPL's total market capitalisation is around Rs 1.08 lakh crore, as per information available on BSE.

Nisaba Godrej was referring to this in the context of GCPL's recent Rs 2,825-crore acquisition of the FMCG business of Sighanias promoted Raymond Consumer Care Ltd along with Kamasutra and Park Avenue brands.

"At our analyst meeting in May, I shared my excitement and how perspectives from the past can give you some thoughts for the future. For me, it goes back to the story of how we acquired our Goodknight brand," she said.

GCPL is a market leader in the fast-growing home insecticide (HI) market in India with the powerful brand Goodknight and HIT.

Over, GCPL's entry in two new segments deodorant and sexual wellness with brands like Park Avenue and KamaSutra, Nisaba Godrej said the opportunity for this in the domestic market is "significant".

"So, through this, we are also increasing the number of categories we play in India, and to categories with the potential to deliver double-digit multi-decade growth," she added.

In 1994, Transelektra, an insecticides company, which made the Goodknight and HIT brands, was up for sale. Then FMCG leader Hindustan Lever was keen to acquire it, but the deal was held up and the owner didn't want to wait longer, she added.

Her father and former chairman of GCPL Adi Godrej was approached by Uday Kotak, the banker overseeing the transaction, with the offer.

"He needed to decide in a week, which didn't leave much time for due diligence. But he was excited by the category and the potential, so he made an offer for Rs 100 crore, and asked Uday to buy 10 per cent of the company, and the then CEO, to buy 5 per cent," she said.

A year later, GCPL entered a joint venture with Sara Lee and sold 51 per cent of the business for Rs 100 core, the same amount it had paid for acquiring the whole company, Nisaba Godrej added.

She further said GCPL is committed to delivering business growth while becoming more sustainable and inclusive in its approach.

"Grooming women leaders and ensuring adequate representation continues to be a key priority. We have set specific goals and regularly review progress while ensuring we make the necessary changes to support women in the workplace," she added.

When Shalini Puchalapalli, Senior Director - Country Head for Google Customer Solutions, joins the GCPL board of directors in November 2023, she will be the sixth woman director on the board, taking women representation to 50 per cent.

"Women represent 47 per cent of our total workforce at GCPL, but only 25 per cent of senior leadership. We are making targeted efforts to take this up to 30 per cent in senior leadership in the next few years through various hiring and development initiatives," she added.

For the financial year ended March 31, 2023, GCPL's consolidated net revenue was at Rs 13,199 crore.