Laila Nutraceuticals in talks with global PEs to raise $40 million, may offer 40 per cent stake

MUMBAI: Promoters of Laila Nutraceuticals, an export-oriented business unit of the Andhra-based Laila Group, is in talks with global PE funds to raise around $40 million, two people with direct knowledge of the development said. The company that’s being valued at around $150 million, will look to sell up to 40 per cent stake.

“The company is in talks with global PE funds to raise money. Currently, the due diligence is on,” said a person involved in the deal. Kiran Bhupatiraju, chief executive officer of Laila Nutraceuticals, did not respond to emailed queries and calls on his mobile.

Laila Nutraceuticals is part of the Laila Group with business interests across sectors such as pharmaceuticals, nutraceuticals, ayurvedic products, sugar, paper, finance, hospitality, real estate and education. It manufactures and exports herbal extracts that are key ingredients for the dietary and nutritional supplements.

The firm is largely dependent on three key herbal extracts -boswellia, garcinia and gymnema - deriving over 95 per cent of its revenues from these products. Founded in 2005 by Dr G Ganga Raju, son of Gokaraju Ranga Raju, the former chairman of Tirumala Tirupati Devasthanam Party in Andhra Pradesh, Laila Nutra had revenues of around Rs 80 crore in FY 2014. The company is being valued at around ten times its sales at around $150 million, or Rs 900 crore.

“The company will sell around 40 per cent stake to private equity funds. It is also open to a strategic partnership. However, the strategic interest of multinationals in Indian nutra makers is low at this point of time,” a senior PE fund manager said. Laila Nutra has its manufacturing facility in Vijayawada, Andhra Pradesh, and supplies these ingredients to its overseas clients such as US-based PL Thomas Inc and Interhealth Nutraceuticals Inc.