MO Alternate Investment Advisors (MO Alts) along with co-investors, has invested ₹330 crores for a minority stake in Lal Sweets, a Bengaluru-based packaged sweets company.
Lal Sweets was advised by Veda Corporate Advisors on the transaction.
Prateek Athwani, promoter of Lal Sweets said, “Our focus on providing authentic and consistent taste to consumers delivered with highest quality of ingredients and packaging has helped us establish Lal Sweets as a household brand name. Our product innovation mindset has allowed us to gain a leading position in products such as ‘Mysore pak’, ‘dharwad peda’, etc. across channels. We look forward to partnering with MO Alts’ team to help us further build the organization, the brand and future growth strategies. Their practical approach along with high focus on governance will help build Lal Sweets into a very long-lasting institution, as demonstrated by them in several growth stage franchises.”
Vijay Dhanuka, Managing Director and Head of Consumer Sector at MO Alts commented, “India’s packaged sweets space is witnessing a rapid double-digit growth, driven by increased focus on convenience and hygiene, uptick in gifting use-cases, shift from unbranded to branded plays, and pull of quality products at attractive pricing. Despite presence of several large incumbents in this space, Prateek has demonstrated stellar product innovation and execution to capture leading positions in company’s core products across modern trade and quick-commerce channels. We are very excited to back him as he looks to build what arguably is India’s first pure-play FMCG packaged sweets brands. With this transaction, MO Alts continues its track record of backing some of the most prominent growth-stage consumer brands in the country.”
Established in 2010, Lal Sweets is a packaged sweets brand specialising in a wide variety of Indian sweets such as Mysore Pak, Dharwad Peda, Kaju Katli, Besan Laddu, etc.
Having pioneered the use of MAP technology to enhance the shelf-life of packaged sweets without the addition of any preservatives, Lal Sweets in a short timeframe has created a very credible brand in the ready-to-eat Indian sweets category. The company has a wide range of products including Indian sweets, bakery items (cookies, cake toast, baklava), and select savoury snacks, etc. Lal Sweets operates like an FMCG company and follows an omnichannel strategy with its products available across 4,000+ modern trade outlets, 7,000+ general trade outlets, quick-commerce platforms, e-commerce platforms, and its own website. The Company also operates a travel-focused retail business with a presence across 40+ outlets at various airports The Company manufactures all of its products in-house across 3 dedicated facilities and has a capital-efficient model having been bootstrapped with strong profitable growth since inception.
MO Alternate Investment Advisors is a subsidiary of Motilal Oswal Financial Services, a diversified financial services group with businesses in Securities, Asset Management, Housing Finance, Private Equity and Investment Banking.
MO Alts is managing both private equity and real estate funds and cumulatively manages an AUM of ~$2 billion between the two asset classes. The private equity vertical focuses on providing growth capital to mid-market companies across its preferred sectors of consumer, financial services, life sciences and niche manufacturing, typically in the range of ₹2,000 – 5,000 million. The private equity vertical has, in the last 18 years, made over 44 investments and has completely exited 17 investments and partially exited 2 investments having delivered a gross MOIC of 5.0x (INR) and gross IRR of 26.3% (INR), making it one of the top performing platforms in India. Many portfolio companies of MO Alts have, over the years, scaled to between $3-7 billion companies from less than $100 million at the time of investment.
Beginning in 2022, MO Alts has seen significant momentum in the consumer space. The platform has since invested over ₹1,800 crores in 7 leading consumer brands across diverse sub-segments such as dry fruits, fashion jewellery, building materials, online gifting, footwear, personal care, and packaged sweets. This period has also seen strong outcomes on the exit front with the fund selling its entire stake in the leading ice-cream brand Dairy Classic delivering 5.5x MOIC and 25.6% IRR, and the country’s leading fashion jewellery brand Kushal’s raising a follow-on round at more than 3x valuation in 1.5 years of our investment.
