Godrej pays Rs 2,825 cr to own Park Avenue, Kamasutra

Godrej Consumer Products has acquired Raymond’s consumer care business, including men’s grooming brand Park Avenue and Kamasutra condoms, for Rs 2,825 crore through a slump sale.  The deal will give Godrej Consumer a larger play in men’s personal care and sexual wellness categories.

The Singhania family-backed Raymond has been looking to divest its consumer care business for over two years. Godrej Consumer Products had in past acquired hair care brand Blunt. This deal is its first large deal with an Indian brand.

Godrej stock down

Analysts say the deal will help Godrej as both the brands are extendable to grooming and sexual wellness segments. But the market seems to have given a thumbs down to the deal. At the time of filing the report, Godrej Consumer shares were down 3% at Rs 924.70 on the BSE.

With sales of Rs 522 crore in FY22, Raymond is one of the top five players in the men’s deodorants category, third largest in branded condom segment, but is a fringe player in mainstream soaps and shampoo market.

Contract manufacturing

The Raymond group will continue to manufacture these brands, sell them to B2B consumers and export. This means that Raymond will contract-manufacture and sell these brands to Godrej Consumer Care. It also means the exit is only from the consumer facing side of this business in the domestic market.

Last year, direct-to-consumer firm Good Glam Group called off talks to acquire Raymond’s consumer care business citing expensive valuations. The development comes at a time when Godrej Consumer Products, which has a portfolio of personal and home care products including Cinthol men’s grooming, Ezee liquid detergent and household insecticide brands Hit and GoodKnight, is witnessing steady recovery in consumer demand in the year.

The Raymond Group also announced the demerger of its consumer facing/lifestyle businesses into Raymond Consumer Care (RCCL), which will, after merger, get listed. Raymond shareholders will get four shares of the RCCL for every five shares they hold.
The group expects the demerger process to be completed over the next 15 months.

(With inputs from PTI)