Fourteen people are zeroing in on acquisition targets for the RP-Sanjiv Goenka group’s fledgling FMCG business. This segment is expected to clock in revenues of Rs 10,000 crore, or about a quarter of the group turnover, in the next five years. According to Sanjiv Goenka, the group turnover in five years would be around Rs 40,000 crore from the present level of Rs 26,000 crore. Power distribution and FMCG are likely to lead the pack, followed by retail, IT and carbon black.
The non-power businesses demerged from CESC —Spencer’s Retail and CESC Ventures comprising FMCG, BPO, realty, and the new entities — are likely to get listed soon. The size of the FMCG business is Rs 500 crore, but the plans are ambitious. An acquisition, for instance, would give it a foothold in a new segment. The size of acquisition being weighed? Goenka makes it clear that he doesn’t want to limit to any size, it could even be Rs 1,000 crore or more.
An FMCG fund has been started. Like a private equity, it picks up stake in small firms. While the primary objective is to make money, the fund gives an opportunity to acquire the firms. Two investments have been made so far: The Souled Store (which does franchisee printing of clothes for Disney etc) and True Elements (into breakfast cereals)...Read More
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