Beauty's back-end gets investor attention; Naturis in talks to raise Rs 100 crore

Investor interest in India’s booming beauty and personal care sector is extending beyond consumer-facing brands to the manufacturing ecosystem behind them, with contract manufacturers, which are mostly family-owned or bootstrapped, beginning to attract institutional capital.

Naturis Cosmetics, which manufactures products for brands including Pilgrim, Plum, Nykaa’s Kay Beauty and Innovist’s Bare Anatomy, for example, is in talks to raise Rs 80-100 crore from investors including Sharrp Ventures and a few domestic family offices, according to people familiar with the matter.

In April, JM Financial’s private equity arm invested Rs 150 crore in NG Electro Products, which produces gels, creams and other personal care products for D2C startups as well as established fast-moving consumer goods (FMCG) companies.


As new-age brands scale rapidly and increasingly outsource production, manufacturers are emerging as a parallel investment theme within India’s beauty ecosystem, according to investors.

“D2C brands across the board, not only in beauty and personal care, are built on the premise that they are asset-light and can scale up rapidly. The contract manufacturing ecosystem is a critical piece of that puzzle,” said a growth equity investor who has evaluated some of these deals. “As investors, we believe that this presents an opportunity to take bets on the broader ecosystem without concentrating too heavily on consumer-facing brands.”

Queries sent to Naturis Cosmetics CEO Rahul Tandon and Sharrp Ventures managing partner Rishabh Mariwala did not elicit a response till the time of publication on Tuesday. The Jammu-based profitable company generated an estimated Rs 250-300 crore in revenue last fiscal year.

“The emergence of funded contract manufacturers is a strong indicator that India’s beauty and personal care ecosystem is moving into its next phase of maturity,” said Ashish Dhir, senior director, consumer and retail, at market intelligence firm 1Lattice.

“In the early stages of category development, investor capital is typically concentrated around consumer-facing brands. As markets scale and become more sophisticated, investment begins to flow across the broader value chain, including manufacturing, R&D, product development, packaging, and supply-chain capabilities,” he added.

According to 1Lattice, India’s online beauty and personal care market is expected to grow to $13 billion by FY30 from $6 billion in FY25, driven by rising affluence, awareness and access.

Growing investor interest in contract manufacturers also coincides with larger players increasing local production. According to 1Lattice, multinational companies such as French beauty major L’Oréal India manufacture around 95% of the products they sell in the country locally.

The sector has also witnessed a flurry of mergers and acquisitions. Most recently, L’Oréal acquired Gurgaon-based Innovist at a valuation of around Rs 4,100 crore. Last year, Hindustan Unilever acquired a majority stake in skincare brand Minimalist for nearly Rs 3,000 crore.

“As beauty assortments become more fragmented and trend cycles shorten, the ability to rapidly develop and scale new products becomes increasingly important,” Dhir said. “Contract manufacturers that can offer formulation support, innovation capabilities, quality assurance, and regulatory compliance are likely to benefit from this trend.”