Motilal Oswal Financial Services subsidiary MO Alternates announced on Tuesday that it has invested Rs 400 crore in Pan Healthcare Private Ltd (Pan Health), a Rajkot-based manufacturer of hygiene products.
Pan Health intends to invest the funds raised in brand development and business expansion.
Baby diapers are sold under the 'Little Angel' brand, adult incontinence products are sold under the 'Liberty' brand, and sanitary napkins and feminine hygiene products are sold under the 'Everteen' brand. The company also sells personal care products under the 'Neud,' 'Mansure,' and 'Naturesure' brands.
Pan Health, founded in 2016, is one of the country's key domestic players in the hygiene products segment.
The company has a pan-India distribution presence with over 350,000 retail touch points and third-party e-commerce channels, which are serviced by a state-of-the-art manufacturing facility in Rajkot.
The Pan Group, a leading business house with diverse interests in various segments such as cement, cotton, steel, agri-trading, and so on, promotes the company.
Orbit Financial Capital served as Pan Health's sole financial advisor on the transaction.
“Our singular focus on offering the best quality product at competitive price points has enabled us to quickly establish ourselves as one of the top domestic brands in a highly competitive hygiene products category," said Chirag Pan, promoter of Pan Health.
"The funds raised will be utilized for investing in the brand, ramping up the distribution infrastructure, and building a robust organization to help us drive the next phase of growth,” Pan said.
“The Indian hygiene products segment is significantly underpenetrated as reflected by per capita diaper consumption of less than 60 units versus 1,000 in US and 400 in China. The market has also been dominated historically by MNC brands with no large Indian brand so far," said Vijay Dhanuka, director and head of consumer sector at MO Alts.
"We are reasonably confident that with its sharp focus on manufacturing excellence, and having delivered on its vision of creating a best-in-class manufacturing plant that surpasses even international setups, Pan Health will be able to address the above issues and create a huge impact in the personal hygiene space," Dhanuka said.
Dhanuka added that the strategy of establishing large-scale operations, whether in manufacturing or offline distribution, will enable them to offer high-quality products at competitive prices not only in tier II/III cities, but also in rural areas.
Vishal Tulsyan's MO Alts invests in underpenetrated categories, large distribution plays, and Indian manufacturing, as well as promoters who emerge from tier II/ III cities and create large economic outcomes.
MO Alts manages both private equity and real estate funds, totaling approximately $1.7 billion across the two asset classes.
The private equity vertical focuses on providing growth capital to mid-market companies in the consumer, financial services, life sciences, and niche manufacturing sectors, with typical investments ranging from Rs 200 crore to Rs 500 crore. In the last 16 years, the private equity vertical has made over 40 investments and completely exited 15, delivering a gross multiple on invested capital (MOIC) of 5.3x and a gross internal rate of return (IRR) of 26.7%, making it one of India's top performing platforms.