KKR Pays $625 Million For Controlling Stake In India’s Vini Cosmetics

Global investment firm KKR is spending $625 million to buy a majority stake in Indian personal care and beauty products company Vini Cosmetics with the aim of scaling the startup’s presence in Asia and other fast-growing markets in the region.

According to a Monday (June 21) press release, KKR is purchasing the stake from Vini’s Founder Group, led by joint managing directors Darshan Patel and Dipam Patel, and venture capital firm Sequoia Capital. The Patels will “continue to hold a significant stake” in Vini, KKR said, and will work with the investment firm as the company continues to grow.

WestBridge Capital, one of Vini’s existing investors, is also increasing its stake in the company through shares purchased from the Founder Group. Terms of WestBridge’s increased stake were not immediately available.

Vini, founded in 2010, manufactures, markets and distributes deodorants, cosmetics and toiletries through its flagship brand, FOGG, as well as OSSUM, GlamUp and several other brands. The products are sold in over 50 countries, with a significant presence in South Asia and the Middle East.

“Vini has experienced remarkable growth over the last 11 years, but we believe we are in the early stages of what our brands can deliver as consumer demand for high-quality personal care products continues to explode in India, South Asia and other fast-growing markets around the world,” said Darshan Patel, who also serves as chairman of Vini Cosmetics.

He added that Vini plans to leverage KKR’s “global platform, resources and operational expertise to take Vini to the next level” by expanding its eCommerce platform, entering new product categories and broadening its distribution networks.

Eyes On India

KKR is making this investment from its Asian Fund IV, a $15 billion fund focused on private equity transactions across the Asia Pacific region that closed in April. KKR’s acquisition of the controlling shares is expected to close next month, at which point Dipam Patel will be appointed as vice chairman; Darshan Patel will continue serving as chairman of the Vini board.

Gaurav Trehan, partner at KKR, said brand loyalty to Vini’s personal care products is “truly impressive,” and the investment firm sees growth opportunities in “a young, emerging middle-class that increasingly seeks upgraded products.”

India’s middle class is estimated to include about 66 million people. Prior to the COVID-19 pandemic, it was anticipated that 99 million Indians would belong to the middle class in 2020, but the country’s deep recession cut that estimate by a third.

However, across all of Asia, the World Economic Forum estimates that 2 billion people were members of the middle class in 2020. A Brookings Institution economist estimated in 2017 that 88 percent of the next 1 billion entrants to the middle class will live in Asia, potentially expanding the Asian middle class to 3.5 billion members by 2030.

Trehan said KKR’s investment in Vini “also underscores KKR’s long-term commitment to support India’s innovative and dynamic companies as they become leaders in their industries.”

KKR has invested approximately $5.7 billion of equity in Indian companies since 2006, including JB Chemicals and Pharmaceuticals; Lenskart, an omnichannel eyewear retailer; and Five Star, a small business lender.

The acquisition comes alongside news that Indian payments platform Paytm is planning an initial public offering (IPO) that would value at an estimated $29 billion, a listing that is expected to be the biggest in the country, the Financial Times reported, citing sources.