Adult and baby diaper company Nobel Hygiene has raised funds to the tune of ₹400-500 crore in a round led by Quadria Capital. The company, which is the leading manufacturer of disposable hygiene products, hopes to touch ₹1,000-crore revenue by FY23 and is looking to expand its manufacturing capacity by setting up a new plant in Gujarat.

With this transaction, which is a mix of primary and secondary capital, existing PE investors CLSA Capital Partners and Access India Fund and its co-investors have exited the company. At the same time, healthcare-focused PE firm, Quadria Capital will now own a significant minority stake in the company. Sixth Sense Ventures has also bought shares in an independent parallel transaction from other angel investors, Nobel Hygiene said in a statement.

Kamal Johari, Managing Director and CEO, Nobel Hygiene said that the company has also raised primary capital of about ₹50 crore through this deal, which will be used for brand-building. “We are already in the process of setting up a new factory at Halol in Gujarat, which will be ready by September and we expect to start production by October at the plant. This will enable us to double our baby diaper production capacity. In the first phase we are investing about ₹110 crore, which is backed by internal accruals,” he added.

Growing demand

Nobel Hygiene clocked ₹600 crore in FY21, registering a growth of about 30 per cent. “Currently the penetration of baby diapers is still very low in the country at about 7 per cent. With growing disposable incomes, we expect a substantial jump on spends in the hygiene segment. We are seeing growth in demand from even smaller towns and rural regions. We expect to close FY2022 with revenues of ₹800 crore. We hope to touch the ₹1000 crore revenue-mark by FY2023,” he added.

According to industry estimates, the ₹6,000 crore- baby diapers sector is growing at a CAGR of 25 per cent in India. The adult diaper industry in India is pegged at about ₹500-600 crore. “We are also strengthening our presence in the feminine hygiene segment under the brand RIO,” Johari said.

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