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COMPETITION COMMISSION OF INDIA
Combination Registration No. C-2024/01/1105
2nd April 2024
Notice under Section 6(2) of the Competition Act, 2002 jointly given by India Advantage
Fund S5 I, HCL Corporation Private Limited, Mirabilis Investment Trust, Mr. Aashil
Apurva Shah, Mr. Ansh Ashit Shah, Pritam International Private Limited, Mr. Rajat
Kumar Bhalotia, and Mr. Rajesh Kumar Bhalotia
CORAM:
Ms. Ravneet Kaur
Chairperson
Mr. Anil Agrawal
Member
Ms. Sweta Kakkad
Member
Mr. Deepak Anurag
Member
Order under Section 31(1) of the Competition Act, 2002
1.
On 19th January 2024, the Competition Commission of India (‘Commission’) received
a notice (‘Notice’) under sub-section (2) of Section 6 of the Competition Act, 2002
(‘Act’) jointly given by India Advantage Fund S5 I (‘IAF S5 I’) through ICICI Venture
Funds Management Company Limited (‘IVEN’), HCL Corporation Private Limited
(‘HCL Corp’), Mirabilis Investment Trust (‘Mirabilis’) through its trustees, Mr.
Aashil Apurva Shah and Mr. Ansh Ashit Shah [Hereinafter, IAF S5 I, HCL Corp,
Mirabilis, Mr. Aashil Apurva Shah and Mr. Ansh Ashit Shah are collectively referred
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to as the ‘Acquirers’]. The Notice was filed pursuant to the execution of the
Shareholders Agreement and Share Subscription Agreement, each dated 22nd December
2023, between Acquirers, Pritam International Private Limited (‘Target’) and
promoters of the Target.
2.
The Proposed Combination envisages subscription of Compulsorily Convertible
Preference Shares (‘CCPS’) of the Target by the Acquirers. Upon conversion of the
CCPS, the total equity shareholding of the Acquirers shall be in the range of 21.3% to
24.1%. There are certain other inter-connected transactions to the Proposed
Combination, inter alia, (a) the Target increasing its shareholding in certain group
companies and partnership firms, and (b) an internal reorganisation of shareholding of
the members of the promoter family in the Target.
3.
In terms of Regulation 14 of the Competition Commission of India (Procedure in regard
to the transaction of business relating to combinations) Regulations, 2011
(‘Combination Regulations’), vide letter dated 7th February 2024, certain information
and clarifications were sought from the Acquirers. The Acquirers submitted the
response to the same vide communication dated 16th February 2024 after seeking an
extension of time. Since the response was not complete, a letter dated 23rd February
2024 was issued and the response to the same was furnished vide communication dated
28th February 2024. However, since the response was incomplete, another letter dated
7th March 2024 was issued and the response was submitted on 12th March 2024.
4.
In response to the letter dated 23rd February 2024, Target, Mr. Rajat Kumar Bhalotia,
and Mr. Rajesh Kumar Bhalotia also became notifying parties by furnishing relevant
documents [Hereinafter, Acquirers, Target, Mr. Rajat Kumar Bhalotia and Mr. Rajesh
Kumar Bhalotia are collectively referred to as the ‘Notifying Parties’].
5.
IAF S5 I is a determinate and contributory trust registered under the Indian Trusts Act,
1882. IAF S5 I is a category II alternative investment fund (‘AIF’) registered with the
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Securities and Exchange Board of India (‘SEBI’) and carries on activities subject to the
SEBI (Alternative Investment Funds) Regulations, 2012. IDBI Trusteeship Services
Limited is the trustee for IAF S5 I. IVEN, a wholly-owned subsidiary of ICICI Bank
Limited, acts as the investment manager of IAF S5 I.
6.
HCL Corp, a part of the HCL Group, is a registered Non-Banking Finance Company. It
is stated to be incorporated with the primary objective of carrying on the business of
holding investments in various entities within its group and investing funds in relevant
securities.
7.
Mirabilis is registered under the Indian Trust Act, 1882. Mirabilis has been incorporated
to invest in Indian companies as a financial investor. It does not have any activities
worldwide. Beneficial owners of Mirabilis hold 100% stake in Addvantis Enterprises
LLP (‘Addvantis’). Addvantis runs a spa called “Veda Earth” and also uses/sells its
own branded personal care products which are not manufactured in-house. These
personal care products include shampoo, conditioner, bodywash, facewash, soap, etc.
8.
Mr. Aashil Apurva Shah and Mr. Ansh Ashit Shah are individual investors and do not
belong to any group.
9.
Mr. Rajat Kumar Bhalotia and Mr. Rajesh Kumar Bhalotia are the promoters of the
Target.
10.
Target, a company registered in India, belongs to the Wonder Products Group of
Companies viz. the Pritam Group and is wholly-owned by the promoters and their
family members. Target and its group companies are engaged, inter alia, in the
development of formulation and contract manufacturing of personal care and grooming
products, i.e., skin care, hair care, baby care, oral care, deodorants, perfumes, etc.
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11.
Based on the activities of the Notifying Parties (including their group entities/affiliates),
the Commission noted that there is no horizontal overlaps between the parties. Further,
there is a potential vertical relationship in the contract manufacturing of beauty and
personal care products in India (upstream market) by the Target and the sale of beauty
and personal care products in India (downstream market) by Addvantis.
12.
The Commission decided to leave the delineation of the relevant market open, as it was
observed that the Proposed Combination is not likely to cause an appreciable adverse
effect on competition in any of the plausible relevant market(s) in India.
13.
Based on the submissions of the Notifying Parties, the Commission noted that the
presence of Addvantis in the downstream market is miniscule and the market share of
the Target in the upstream market is in the range of [5-10]%. Further, large players such
as Hindustan Foods Limited, VVF (India) Limited, RM Chemicals and Lotus Beauty
Care Private Limited operate in the upstream market. Based on the foregoing, it appears
that the Proposed Combination is not likely to foreclose competition in any market in
India.
14.
Considering the material on record, including the details provided in the Notice and the
assessment of the Proposed Combination based on the factors stated in Section 20(4) of
the Act, the Commission is of the opinion that the Proposed Combination is not likely
to have any appreciable adverse effect on competition in India. Therefore, the
Commission approves the Proposed Combination under Section 31(1) of the Act.
15.
This order may be revoked if, at any time, the information provided by the Notifying
Parties is found to be incorrect.
16.
The information provided by the Notifying Parties shall be treated as confidential in
terms of and subject to provisions of Section 57 of the Act.
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17.
The Secretary is directed to communicate to the Notifying Parties accordingly.
