Home-grown FMCG company Marico Ltd expects to complete its acquisition of the men’s grooming brand, Beardo, by March 2020. Marico’s stake in the Ahmedabad-based start-up stood at 42.88 per cent as on December 31, 2018.

Sources said that the acquisition may happen through primary infusion and secondary buy-outs.

Beardo, still an unlisted entity, plays in the mass-premium-to-premium men grooming category.

Mumbai-based Marico had in March 2017 made a strategic investment in Zed Lifestyle (owners of brand Beardo) for an undisclosed consideration. Sources peg the investment to be around ₹50-60 crore.

“By end of next year (March 2020), Beardo will become a 100 per cent subsidiary of Marico Ltd. Beardo is already a profit making company,” Vivek Karve, CFO, Marico Ltd, told BusinessLine .

According to him, the ‘Beardo brand will continue, post acquisition.

“It has a significant fan following. So why would we not continue with it,” said Karve, adding that Beardo has been able to create “its own e-commerce selling model”.

Start-ups like Beardo have been able to make in-roads in the still niche male grooming market in India. While these brands remain predominantly online first, they either sell through their own portals or are available across e-tailers like Amazon, Flipkart and others.

The ₹3,600-crore male grooming market is growing at a double-digit CAGR.

Male grooming

Marico has been focussing on the men’s grooming category for a while. Its presence in India is through the Set Wet (deos, perfumes and hair grooming products) and Parachute Advansed Men Hair cream brand in the mass to mass-premium categories; while the eight-month-old Set Wet Studio X brand is its online only mass-premium range (face-wash and body-wash, hair and beard grooming, etc).

The company’s male grooming category has witnessed a 13 per cent growth in Q3 FY19 (over Q3 FY18) in value terms. Set Wet hair gels remained its most dominant product in the segment with nearly 56 per cent value market share. Marico has introduced small value packs under the Set Wet brand.

According to a report by Edelweiss Securities, there is “enough opportunities for customers to buy products in spite of recent change in FDI policy. Moreover, the report points out that in the deodorant space there is “no differentiation”; whereas the overall male nourishment is “a broad spectrum where the room to grow is huge”.

“The company (Marico) is confident of clocking a 15-20 per cent growth rate in male grooming,” it said.