Baytree's investment into Godrej consumer underlines the long pending second line of investments to be made by the Asian SWF in India and other growing economies of the region.

Godrej is issuing 10% Preference shares to the Baytree arm of Temasek at a good $8.2 price or less than $6.30 if you consider Indian rupeee's expected levels of INR 65 to the Dollar $$)  The equity makes Temasek a 4.9% investor in GCPL, Godrej Consumer. The new Rupee 1.00 par value shares will help the company fund and stablise their acquisitions in hair dye maker Cosmetica in Chile and last year's acquisition of African hair care firm Darling.

Cosmetica for example cost GCPL a hefty INR 10.8 bln for its $36 mln turnover but will add INR 2 bln in profits every year after the acquisition is completed. African Darling is thru one phase of marger integration as per Adi Godrej and likely to complete integration by 2013. GCPL grew revenues at 36% from December 2010 profit growing faster to INR 1.67 bln for the entire company growin g12% volumes in the Indian business

  Adi Godrej's interview in today's DNA is available here 

The company has acquired domestic brands like Genteel and Swastik, haiir color Rapidol and accesories Kiny in South Africa as well as Tura in Nigeria and an insecticide company, Megasari in Indonesia

The company has made a comeback with its pure soaps in India, growing volumes in soaps at 18% in the latest quarter and Magasari's innovation will likely be introduced to compete with Good Knight in India. Godrej also likes to talk about its 1-2% R&SD spend and may want to grow the advertising on its brands in line its new mores , probably for its proefessional hair brands in which it has increased spends and M&A purchases.  

While Malaysian Khazanah has just changed its charter from a Energy rich SWF to a diversified fund and may be more interested in smaller/monopoly plays in smaller Indo China economies, Temasek continues to farm the big money in China, Singapore and India.  

Korea will probably make its own surplus SWF investments but still needs some inward interest from other SWF funds while india's Top 20 in the Private Sector have been a matter of considerable Interest for Temasek since 1999. 

The use of so many subsidiary vehicles for Temasek however incl Cedar , Baytree and directly as well as the bigger sibling in GIC is likely to make governance complex however for the coming generations of investment from Temasek as well. 

 

Posted via email from The India Investment Post