The beauty and personal care (BPC) market in India, estimated at just over $22 billion in 2023 and growing in low double digit annually, is seeing strong interest from private equity investors while consolidation is also taking place through mergers and acquisitions.
The entry of large conglomerates such as the Tata Group and Reliance Industries into the segment with their ability to bring in exclusive international brands and partner with boutique beauty product makers is providing consumers across the spectrum with more choices while expanding the segment.
From 2021 to 2024 so far key PE deals in the segment have aggregated to over ₹4000 crore while M&As have been of the order of over ₹17300 crore, according to BDO India, a professional services organisation. India’s BPC industry, the 6th largest globally, is expected to touch $33 billion in 2027, growing at 11 per cent annually, according to BDO. The top 20 brands that have about a third of the total BPC market in India are dominated by MNCs such as Colgate, Hindustan Unilever, LÓreal and Reckitt Benckiser.
That is now changing with the entry of players such as Nykaa, Mamaearth, Purplle, Plum and others who have their own brandsThe entry of celebrities such as Priyanka Chopra (Anomaly), Katrina Kaif (Kay Beauty), Deepika Padukone (82°E), Masaba Gupta (LoveChild), has given a further fillip to the beauty industry.
PE flows, M&As
Some of the biggest names in private equity and sovereign wealth funds have invested in the Indian BPC segment, such as Warburg Pincus, Singapore’s GIC, Peak XV, Bessemer Venture and others. Large brands are also floating VC arms to invest in early-stage BPC companies, BDO pointed out.
In 2024 so far brands such as Pilgrim (Heavenly Secrets), Renee, Foxtale and Myglamm have attracted investments from top PE firms. For instance, a consortium of PE firms such as Warburg Pincus, Prosus, Bessemer Venture Partners and Accel Partners invested ₹310 crore in Myglamm for a 3.2 per cent stake, BDO data showed. The brand had earlier raised over ₹1000 crore from Warburg, Prosus and L’Occitane International in 2021 for a 16.5 per cent stake.
One of the biggest M&A deals in the segment was that of Godrej Consumer buying Raymond Ltd’s FMCG business for ₹2825 crore last year, while Radhakishan Damani acquired Health & Glow for ₹750 crore. Private equity firm Carlyle acquired over 64 per cent stake in VLCC for Rs 2470 crore. In 2022, Reliance Retail had acquired a majority stake in Mayuri Kumkum for ₹293 crore.
There is a huge opportunity for the beauty segment in India, which contributes only 4 per cent to the global BPC market, while per capita spend on beauty care is only about $15, which BDO expects to go to $27 in 2030.