Sixth Sense Ventures, the consumer-focused fund that has backed companies such as Bira91, Vahdam Teas and Veeba Foods, has invested Rs 100 crore in Indore-based spices brand Pushp, according to ETtech report.
The deal involves a significant secondary portion in which the Mumbai-based investment firm has bought the stake in Pushp from the 49-year old company’s first institutional investor, A91 Partners, Nikhil Vora, founder and CEO of Sixth Sense Ventures, told ET.
A91 Partners, an investment firm founded by former Sequoia India executives Abhay Pandey, VT Bharadwaj and Gautam Mago, had bought a 25% stake in Pushp in 2020 for Rs 125 crore.
Pushp, which processes spices such as chilli, turmeric and coriander, in addition to blending spices, has a stronghold in the segment in Madhya Pradesh. It plans to double down on its national play in the Rs 90,000-crore market.
Of this, the branded spices market is estimated to be around Rs 25,000 crore, and has seen large fast-moving consumer goods (FMCG) companies such as Dabur, Wipro Consumer Care, Tata Consumer and Emami Agrotech either enter or double down on their presence in the segment in the last 12-15 months.
In January this year, Delhi-based FMCG major Dabur India closed the acquisition of 51% stake in Badshah Masala for Rs 587 crore.
Other legacy players in the spices market include Everest Food Products and MDH.
“One key thing that I’ve seen in the consumer market is that incrementally a lot of disruptors are emerging from regional powerhouses,” Vora said. “In spices, there’s a similar play. You see a couple of national companies like Everest and MDH, and then there are strong regional companies because taste and preferences vary across the country.”
In addition to Madhya Pradesh, Pushp also sells its products in states like Maharashtra, Rajasthan, Uttar Pradesh, Bihar and Gujarat.
“There will always be regional players that dominate one state, but don’t have the ability to go pan-India,” said Vora. “Pushp has leadership in two states and relevance in 2-3 more, which gives it the ability to nibble into incremental growth share across other states.”
According to regulatory filings sourced from Tofler, Pushp reported a 20% year-on-year increase in its FY23 operating revenue to Rs 338 crore, even as its profit fell to nearly Rs 10 crore from more than Rs 16 crore on account of increasing raw material prices.
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