Goldman and ChrysCapital are vying to buy 20% stake in Shriji which could value the company at nearly ₹1,200 cr
Tata Capital Healthcare invested about $3 million in the drug packaging maker in 2015
Mumbai: American investment bank Goldman Sachs and homegrown private equity (PE) firm ChrysCapital are vying to buy a 20% stake in Shriji Polymers (India) Ltd, two people aware of the development said.
The first private equity fund of Tata Capital Healthcare, a $70-million focusing on healthcare and life sciences, had invested about $3 million in the drug packaging maker in 2015. The Tata Capital-managed fund is now planning to exit the Ujjain-based company, the people cited above said on condition of anonymity. “Shriji Polymers is expecting to get a valuation of nearly ₹1,200 crore. The deal is still being negotiated, there is no firm offer on the table yet," one of the persons cited above said. The sale process is being managed by the investment banking firm ICICI Securities, he added.
ICICI Securities, Tata Capital and Goldman Sachs declined to comment, while e-mails sent to the company’s promoter Anand Bangur and ChrysCapital remained unanswered.
Founded in 2005 by Bangur and Vishnu Jajoo, Shriji Polymers is a maker and exporter of high-density polyethylene (HDPE) containers, multilayer bottles and polypropylene (PP) caps for packaging of pharmaceutical materials. Most of its products are exported to regulated markets like the US, Canada and China.
The company’s manufacturing plants are located in Ujjain and Pithampur SEZ in Madhya Pradesh, Goa, Hyderabad, Baddi in Himachal Pradesh, China and US with a combined annual plant capacity of nearly 15,000 million tonnes per annum. Its clients include major pharmaceutical firms such as Lupin Ltd, Dr. Reddy’s Laboratories Ltd, Glenmark Pharmaceuticals Ltd and Mylan N.V.
Shriji Polymers has been on an expansion spree for the last three years. In 2017, it acquired 100% stake in its peer Four M Propack Ltd for a sum of up to ₹19.2 crore.
The next year, it expanded its geographical reach in China with a new manufacturing facility—Shriji Polymers (Hubei) Ltd, under a joint venture partnership. In May 2019, it started a manufacturing facility in the US.
For the fiscal year ended 2019, Shriji Polymers’ consolidated operating income grew about 26% to ₹304.9 crore, compared to the previous fiscal. Its net profit also rose nearly 15% to ₹51.2 crore on a year-on-year basis.
The development comes as Indian companies are trying to gain market share in the global pharmaceutical packaging market, increasing their attractiveness to growth investors. The Indian pharmaceutical packaging market, estimated to be roughly around $2 billion in 2017, is expected to reach over $3.7 billion over the next three years owing to new innovations, development in generic market and rising trend of contract packaging, according to a report by industry analysis firm Mordor Intelligence. As of 2020, the Indian packaging industry constituted about 4% of the global packaging industry, the report said.