SAIF Partners India has invested $10 million into Manpasand Beverages Pvt Ltd, a Gujarat-based juice manufacturing and marketing company, for a minority stake. The firm is best known for its brand Mango Sip, which has a strong presence in semi-urban and rural India. This is a primary infusion to help the company grow to the next level by strengthening its manufacturing and marketing presence.
Manpasand is headquartered in Vadodara, Gujarat, and is promoted by Dhirendra Singh, a first-generation entrepreneur.
“We believe that the fruit drink market in India is underpenetrated and there is great growth potential in this industry. We are pleased to partner with Manpasand as we believe this is one of the few companies which have the brand, management team, distribution reach and manufacturing capability to exploit the market opportunity,” said Vishal Sood, Partner, SAIF Partners.
There has not been a lot private equity and venture capital action in the juice space. However, fruit juice maker Tunip Agro, which sells the Onjus brand of beverages, had filed for Rs 45.5 crore public float last year.
Pure fruit juices are the preferred drink among the various fruit drinks in circulation here and this sector has witnessed around 10 per cent annual growth. But according to many, this space still has to overcome quite a few problems.
For instance, advertisements help in creating awareness but these are a costly affair. Moreover, different sales tax structures in different states (sales tax in Delhi is 8 per cent while in Kerala, it amounts to 20 per cent) make the pricing decision tough. And unlike the west, where people regularly drink fruit juice, Indians don’t consume it on a daily basis.
Private equity firms have been increasingly looking to tap small-town brands as they are keen to leverage India’s domestic consumption story, especially those beyond the major metros. Earlier this year, Sequoia Capital India had invested $30 million in Indore-based Prakash Snacks Pvt Ltd, which makes packaged food and snacks under the brand name Yellow Diamond.
Another investment was Carlyle’s Rs 110 crore infusion in Andhra Pradesh-based Tirumala Milk Products, one of the top three private dairy operations in southern India.