Home / Companies / Piramal Enterprises acquires baby care brand Little’s

Mumbai: Ajay G. Piramal-controlled Piramal Enterprises Ltd has entered the baby care segment by acquiring a 100% stake in Little’s India, the country’s oldest baby care products brand, for an undisclosed amount.

This acquisition will add eight categories to Piramal Enterprises’ consumer product division which sells Lacto Calamine lotion and headache drug Saridon.

Little’s baby care range includes feeding, grooming, bath, bedtime, clothing, travel and playtime accessories, according to its website.

Darshan Deora is heading Little’s as its managing director.

“After Johnson and Johnson (J&J), there are not many serious players in baby care market in India as the sector is too fragmented. However, people will be ready to pay a premium as long as the products from emerging companies are significantly differentiated," said Abhishek Sharma, pharma analyst at India Infoline Finance Ltd.

Piramal Enterprises entered the over-the-counter (OTC) market with the acquisition of Saridon from Roche Holding AG and Lacto Calamine from Duphar Interfran Ltd in the early 1990s. They were followed up by joint ventures with Reckitt Benckiser Group Plc and Boots Plc to get their OTC range to India in the 1990s itself. It was only in 2007 that Piramal decided to establish its own consumer products division.

“There is significant upside in this acquisition. We are in the process of building a portfolio of brands. Little’s brand perfectly fits in our portfolio and expedite our target to scale up the business to 1,000 crore by 2020 from the current 350 crore," said Kedar Rajadnye, president and chief operating officer (consumer products division) of Piramal.

Since 2007, the business has grown at a compounded annual growth rate (CAGR) of 30% and has jumped ranks from 40th in 2007 to the seventh position in 2015, he said.

“We have built a portfolio of strong brands of which six are among the Top 100 OTC brands in India," said Rajadnye. He said heritage and legacy are two important things in building brands, adding Little’s has both.

The Little’s brand is available at chemists, cosmetics and kids stores, modern trade and e-commerce formats.

According to data released by media and events company UBM India last year, India’s children and baby care market was pegged at $11.12 billion in 2014, growing at a CAGR 17%. About 50 million babies in India are in the age group of 0-2 years and 304.8 million children are in the age group of 0-12 years, as of 2014. “India is witnessing a change in spending patterns of parents owing to higher disposable income and a change in lifestyle along with increase in the proportion of working women," UBM India said.

Rajadnye said the consumer products business unit is looking at a couple of acquisitions in new OTC market categories and is expected to seal the deals shortly. He did not divulge details. He added that Piramal is still focusing on its original business of healthcare while venturing into other areas such as financial services, real estate and infrastructure financing.

Piramal, which started with textiles, is contemplating a merger with Infrastructure Leasing and Financial Services Ltd (IL&FS).

Ajay Piramal, who is no stranger to building and acquiring businesses, bought 20% of Shriram Capital Ltd in April 2014 and took over as chairman later that year. The Piramal Group also has its own real estate and structured finance businesses.

Piramal’s entry into pharmaceuticals came around 1988 when he acquired Nicholas Laboratories Ltd for 1.6 crore at a time when most multinational drug makers were exiting India.

The payback came 22 years later when, in 2010, US-based Abbott Laboratories bought his Indian branded generics business for $3.72 billion in a blockbuster deal that valued the unit at nine times annual sales and 30 times profit.

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