Nilon’s looks to sell up to 49%, NRI investor Kirit Pathak may get exit option

MUMBAI: Pune-based packaged food and pickle-maker Nilon’s Enterprises is looking to sell up to 49% to a strategic investor, three people with direct knowledge of the plans said. The sale will give its non-resident Indian investor an exit option, these people said. The company, valued at Rs 450-500 crore, has appointed investment bank Avendus Capital to scout for investors.

Kirit Pathak, a London-based entrepreneur, had invested Rs 75 crore in the company in 2008. He holds 26-50% in various group entities of Nilon’s Enterprises.

“The promoters are looking at a strategic investor who can buy out the existing investor and can take the company to the next level of growth,” said an investment banker privy to the development.

Founded in 1962, Nilon’s sells Indian spices, vermicelli, ketchup, sauces, chutney, instant mixes and macaroni. Apart from India, Nilon’s Enterprises sells its products in countries such as France, Japan, Dubai, Singapore, Malaysia, South Africa, Australia and New Zealand.

Dipak Sanghavi, managing director of Nilon’s, confirmed the plan to induct a strategic investor without giving any further details. Pathak could not be reached for comment.

Investors, both financial and strategic, have been looking at entering the Indian packaged food business. Last week, ET reported the stake-sale plans of Bikaji Foods, a snacks and packaged food maker.

“India remains a very strong consumption story (despite) the recent slowdown,” said Vikram Hosangady, head, transactions and restructuring practice, and national leader for private equity at KPMG India.

“The rural market continues to grow and with the good monsoons, will be a driver for most food and FMCG (fast-moving consumer goods) companies,” Hosangady said.

According to a report by Research and Markets, the Indian packaged food industry has grown at 15.6% every year since 2007 and this is expected to accelerate in the next five years until 2018.