Ethnic Fabrics and handicrafts retailer Fabindia has acquired 40 per cent stake in Organic India Pvt Ltd, a Lucknow-based organic food and supplements firm which is already a product vendor to Fabindia, for an undisclosed amount. Fabindia will be merging its own organic division into Organic India and will also infuse fresh cash into Organic India as part of the deal.
“We entered into a strategic alliance with Fabindia 8-10 years back. We were already working as partners. Since Fabindia has now picked stake in Organic India, things have become formalised,” Krishan Gupta, managing director and global CEO at Organic India, told VCCircle.
He added that Organic India generated revenue of Rs 75 crore for the year ended December 2012 and is expecting a growth of 30-40 per cent in the current year. The two brands Fabindia and Organic India will co-exist in the Fabindia stores.
Gupta said, Organic India as a standalone brand has recently come up with a store in Lucknow airport and would also be coming up with wellness centres in the future, which is in the conceptualizing stage. “Going forward, our plans would be in consolidation and in tie ups with Faindia,” said Gupta. He added the company became profitable four to five years back.
The Economic Times which first broke the news had said Fabindia will also pump in Rs 15 crore in the combined company as part of the deal.
Organic India was founded in 1997 in Lucknow. The company promotes organic products and supports sustainable farming. The firm cultivates, collects, processes, manufactures and marketS Certified Organic Tulsi Teas, Herbal Supplements, Psyllium, Castor Oil, Ayurvedic and Medicinal Herbs, and many other organic foods and spices Yoav lev, an Israeli citizen now known as Bharat Mitra, co-founded Organic India in 1997 with his wife Holly Bronfman , now named Bhavni. Both are disciples of Sri Poonja and were renamed by him.
Today, Organic India is engaged with a few thousands marginal farmers in several clusters of about 2.4 million hectares in Uttar Pradesh, Andhra Pradesh and Rajasthan, who grow tulsi, fruits and vegetables, spices and herbs to make a whole host of herbal supplements, medicines, spices, edible oils and other food products.
Mitra aims to make Organic India a Rs 150 crore FMCG player this year. At present, Organic India generates almost 60 per cent of its annual revenue from exports to 35 countries including the US, Australia, Israel, UK, Germany and many other European nations.
The company also plans to enter herbal cosmetic and beauty products as well as opening 500 Organic India branded beauty and wellness saloons nationwide.
In March last year, Premji Invest, the investment fund owned by Wipro chairman Azim Premji acquired 7 per cent stake in Fabindia for Rs 100-125 crore, valuing the company at over Rs 1,500 crore.
During the same time, L Capital, the private equity arm of the world’s largest luxury conglomerate LVMH Group, also bought eight per cent in Fabindia from Wolfensohn Capital Partners, in a secondary deal, for a similar amount.
The US venture capital fund owned by ex-World Bank president James Wolfensohn had invested $10 million in the company in 2007.
Fabindia, founded in 1960 by John Bissell to market the diverse craft traditions of India, started out as an exporter of home furnishings. The first Fabindia retail store was opened in Greater Kailash in Delhi fifteen years later. In mid 1990s, William Bissell took over the company from his father John Bissell. William Bissell and family own 50 per cent stake in Fabindia. Today, the firm has around 170 stores in the country.
(Edited by Prem Udayabhanu)