Popular, well-established Indian brands are increasingly cashing in on multinational interest in the domestic market.

This time, it's the Preethi brand of kitchen appliances from the South that has joined the Philips Consumer Lifestyle stable. Though it is yet not known what amount Maya Appliances' CMD Mr T.T. Varadarajan has made from the deal, it is the case of another local entrepreneur finding valuations attractive enough to give away a brand that built its reputation over many years.

Last month, founder and chairman, Mr Girish Patel of Paras Pharmaceuticals, did the same thing. He sold his ‘son-of-the-soil' brands Moov and Krack to Dettol and Harpic-maker Reckitt Benckiser. The British consumer goods major coughed up a whopping Rs 3,260 crore for the ointment brands that cater to analgesic pain and cracked heels.

While others looking to buy the brand found the valuations on the high side, Reckitt had obviously done its home work and said the amount was in line with the business potential that had been unlocked by the acquisition in a key growth market.

It is not just FMCG and food brands that are in demand. Last week, Kolkata-based Friday Media Pvt Ltd sold its start-up SoSasta.com to a Chicago-based e-commerce portal Groupon. Though it is not known how much the deal was worth, clearly the US firm found value in owning the company that provides discount deals in 11 Indian cities.

Over the years, many other home grown brands have been sold to MNCs. Take, for instance, MTR Foods which was undisputedly the country's most well-known idli and dosa ready mix brand to the Norwegian foods company, Orkala ASA three years ago.

The all-cash deal here was worth Rs 354 crore. Obviously the Norwegians saw the potential of a brand that could soar with the right marketing inputs.

Earlier, too, Indian entrepreneurs have lost out to MNC giants. These include iconic brands such as Thums-Up and Limca that were bought by Coca-Cola; Viva and Maltova by GlaxoSmithKline Beecham; and Kwality Ice Cream by Hindustan Unilever.

Indian brands no doubt are going places, but the question remains why Indian entrepreneurs are selling out.

It must be noted that in the case of both Paras Pharmaceuticals and MTR Foods, a significant portion of the equity was with private equity firms that made their exits before the deals were inked.

“It is true that MNCs have deep pockets which Indian companies find difficult to compete with. But the other reason is that the deals bring in good bucks and entrepreneurs feel that they can invest the same in their other businesses,” says an industry watcher, while predicting that more brands may go the same way in the future.

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