Creador frontrunner to buy Tata Capital's stake in packaging co

Mumbai: The Kuala Lumpur based private equity firm Creador is emerged as the frontrunner to acquire a minority stake in Shriji Polymers- a leading packaging solution provider for global pharmaceutical industry. Other private equity firms who are in race include Kedaara Capital, ChrysCapital and Goldman Sachs. The deal will value the company at Rs.1200 crore.

The new investor will buy about 20% stake in Shriji, including 13% stake held by Tata Capital Healthcare Fund and a primary capital infusion into the company, said two people aware of the development. ICICI Securites is running the mandate for Tata Capital.

Creador has signed an exclusivity agreement with the existing investor, said one of the sources.

A clutch of private equity funds such as Kedaara Capital, Creador, ChrysCapital and Goldman Sachs have evinced interest to acquire the 13% stake held by Tata Capital Healthcare Fund in Shriji Polymers, ET reported in March.

Tata Capital Healthcare Fund had invested Rs.40 crore in Ujjain based Shriji Polymers in 2015.

"Creador continues to be interested in new deals in India. There are several investment opportunities under evaluation at any point of time. It would be difficult for us to comment on specific deals," said a Creador spokesperson. A Shriji spokesperson declined to comment while mail sent to a Tata Capital Healthcare did not elicit any response.

Founded in 2011 by Brahmal Vasudevan - former Managing Director at ChrysCapital, Creador invests in companies across South and Southeast Asia. The firm has raised $565 million for its fourth fund, Creador IV.

Creador has exposure in Indian healthcare space through its investment in Corona Remedies - a drug formulation manufacturer and Paras Healthcare, a North India focused hospital chain.

In last October, Creador has led a Rs300 crore ($42 million) investment in Kogta Financial, a non-banking finance company (NBFC) along with Morgan Stanley Private Equity Asia (MSPEA). Creador has also invested in Ujjivan Financial Services, the holding company of Ujjivan Small Finance Bank.

Founded in 2005, Shriji Polymers' portfolio of products include high-density polyethylene (HDPE) containers, derma bottles, tablet applicators, dosing cards and similar self-administered metered dosing devices. The company has production capacity of 2-million containers and 3-million closures per day.

Shriji's products are sold in markets like the US, Canada and China and its major clients include Strides Arcolabs, Sun Pharma, Mylan, Indoco, Ipca, Wockhardt, Eisai and Lupin.

Tata Capital Healthcare Fund, the healthcare-focussed private equity arm of financial services firm Tata Capital Ltd, raised Rs.320 crore in 2013 and made around 8 investments till date. It invested in Intas Biopharmaceuticals, Novalead Pharma, Amanta Healthcare, Sandor Nephro Services, Lokmanya Hospitals, Sai Lifesciences Limited, Brinton Pharmaceuticals and Konverge Healthcare.

It had plans to raise its second fund worth $200 million, which didnt materialise yet.

In last couple of years, Packaging industry in India has seen large PE deals such as Blackstone's investment of $460 million to acquire Essel Propack that manufactures laminated plastic tubes catering to the fast-moving consumer goods (FMCG) & pharma sector in 2019 and acquisition of Manjushree Technopack - India’s largest rigid plastic packaging solution provider, by US fund Advent International in 2018.

The packaging industry in India is expected to touch $73 million in 2020 from $32 billion in FY 2015.