Kedaara Capital Fund III LLP

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Page 1 of 4 COMPETITION COMMISSION OF INDIA (Combination Registration No. C-2023/08/1047) 3rd October 2023 Notice under Section 6(2) of the Competition Act, 2002 given by Kedaara Capital Fund III LLP CORAM: Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Order under Section 31(1) of the Competition Act, 2002 1. On 10th August 2023, the Competition Commission of India (‘Commission’) received a Notice under Section 6(2) of the Competition Act, 2002 (‘Act’) given by Kedaara Capital Fund III LLP (‘Acquirer’). The notice was filed pursuant to the execution of Share Purchase Agreement (‘SPA’) dated 3rd July 2023 between Acquirer and Kedaara Capital Fund II LLP (‘Seller 1’) and SPA dated 3rd July 2023 between Acquirer and Kedaara Norfolk Holdings Limited (‘Seller 2’) [Hereinafter, Seller 1 and Seller 2 are collectively referred to as ‘Sellers’]. Additionally, a Deed of Adherence to the existing shareholders’ agreement, inter alios, between the Acquirer and the Sellers was also executed on 3rd July 2023. Combination Registration No. C-2023/08/1047 Page 2 of 4 2. The Proposed Combination envisages an acquisition of 1.74% of the issued and paid- up share capital of the Lenskart Solutions Private Limited (‘Target’/‘Lenskart’) on a fully diluted basis by the Acquirer from the Sellers. The Proposed Combination is a transfer of shares of the Target between the Sellers and the Acquirer, which are affiliate entities under common control / management. 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 21st August 2023, certain information and clarifications were sought from the Acquirer. The Acquirer submitted the response dated 24th August 2023. Since the response was incomplete, another letter was issued on 1st September 2023 and the Acquirer submitted the response dated 6th September 2023. 4. The Acquirer is a Category II Alternative Investment Fund registered with Securities and Exchange Board of India (‘SEBI’) engaged in the activity of investing in companies. It is a part of the Kedaara group. The Kedaara group has investments in a variety of companies across sectors such as manufacturing, industrials, auto components, retail and wholesale trading, micro-finance, banking, non-banking financial services, logistics, packaging and health care. 5. One of the portfolio entity of Acquirer’s group is ASG Hospital Private Limited (‘ASG’). ASG is involved in operating and running hospitals and also deals in eyewear products such as prescription eyeglasses. ASG is present in 21 states and over 100 cities through its eye hospitals whose primary line of business is to provide eye care services such as cataract, retina, glaucoma, lasik and other complex eye care procedures along with sale of eyewear products. The in-house brands of lens, frames and sunglasses are procured by ASG from its subsidiary, which in turn procures in- house brands from both contract manufacturing and open market sourcing from distributors and global brand franchisees. This subsidiary does not procure optical products directly from any brands or retailers, such as the Target. Further, ASG’s Combination Registration No. C-2023/08/1047 Page 3 of 4 eyewear product sales are made through its optical outlets integrated with the hospital. All of the sales made by ASG are to its captive customers i.e., incoming patients and such sale is only if the incoming patients are prescribed eyewear products by ASG. 6. The Target is the ultimate holding company of the Lenskart group. The Target is a private limited company incorporated in India. It is engaged in manufacture, wholesale and retail sale of eyewear products, including eyeglasses, sunglasses and eyewear accessories in India. Products and services are sold by Lenskart through both brick- and-mortar sales as well as online sales channels. The Target also operates globally through its subsidiaries/joint ventures located outside in India. The Target is not engaged in contract manufacturing for any third party through its manufacturing facilities. 7. Considering the activities of the Acquirer/Kedaara Group (including their affiliates) and the Target, it is noted that ASG and the Target exhibit horizontal overlaps in the broad market for manufacture and/or sale of eyewear products in India (‘Broad Market’). Within this Broad Market, these entities exhibit overlaps in the segments of manufacture and/or sale of eyewear products in organized segment in India (‘Narrow Segment’). The Broad Market may be segmented further on the basis of category of eyewear products such as spectacles, sunglasses, contact lenses etc. However, considering the rights and shareholding of the Kedaara Group in the Target pre and post the Proposed Combination, there will be no change in the competition dynamics. Accordingly, the Commission decided to leave the delineation of the relevant market(s) open. 8. Based on the submissions of the Acquirer, the Commission noted that the incremental market share in the Broad Market as well as Narrow Segment is insignificant. The combined market shares of ASG and Lenskart in FY2022-23 based on value in the Broad Market and Narrow Segment is between [5-10%] and [25-30%], respectively. There are several players operating in the market such as Essilor India, Titan Eye+, Combination Registration No. C-2023/08/1047 Page 4 of 4 GKB Group, Bausch and Laumb, Vision Express, Dayal Group, Lawrence and Mayo etc. 9. 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. 10. The order may be revoked if, at any time, the information provided by the Acquirer is found to be incorrect. 11. The information provided by the Acquirer shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act. 12. The Secretary is directed to communicate to the Acquirer accordingly.