Sixth Sense Ventures, the consumer-focused fund that has supported companies like Bira91, Vahdam Teas, and Veeba Foods, has infused INR 100 crore into the Indore-based spices brand Pushp.
The deal involves a significant secondary portion in which the Mumbai-based investment firm has bought the stake in Pushp from the 49-year-old company’s first institutional investor, A91 Partners, Nikhil Vora, founder and CEO of Sixth Sense Ventures, explained.
A91 Partners, an investment firm established by former Sequoia India executives Abhay Pandey, VT Bharadwaj, and Gautam Mago, acquired a 25% stake in Pushp for INR 125 crore in 2020.
Pushp, known for processing spices like chilli, turmeric, and coriander, as well as blending various spices, holds a strong position in the segment within Madhya Pradesh. The company intends to intensify its national presence in the INR 90,000-crore market.
Of this amount, the estimated value of the branded spices market is around INR 25,000 crore. Over the last 12-15 months, major fast-moving consumer goods (FMCG) companies, including Dabur, Wipro Consumer Care, Tata Consumer, and Emami Agrotech, have either entered or substantially increased their presence in this segment.
In January this year, the Delhi-based fast-moving consumer goods (FMCG) major, Dabur India, finalized the acquisition of a 51% stake in Badshah Masala for INR 587 crore.
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Other established players in the spices market include Everest Food Products and MDH.
“One key thing that I’ve seen in the consumer market is that incrementally a lot of disruptors are emerging from regional powerhouses,” Vora said. “In spices, there’s a similar play. You see a couple of national companies like Everest and MDH, and then there are strong regional companies because taste and preferences vary across the country.”
Aside from Madhya Pradesh, Pushp also vends its products in regions such as Maharashtra, Rajasthan, Uttar Pradesh, Bihar, and Gujarat.
“There will always be regional players that dominate one state, but don’t have the ability to go pan-India,” said Vora. “Pushp has leadership in two states and relevance in 2-3 more, which gives it the ability to nibble into incremental growth share across other states.”
As per regulatory filings obtained from Tofler, Pushp disclosed a 20% year-on-year surge in its FY23 operating revenue, amounting to INR 338 crore. However, its profit declined to nearly INR 10 crore from over INR 16 crore due to escalating raw material prices.
For FY24, Vora mentioned that Pushp is poised to achieve a revenue of INR 400 crore.
A company statement said, “Pushp has strategically invested in distribution and branding efforts, extending its reach beyond Madhya Pradesh to states like Maharashtra, Rajasthan, Uttar Pradesh, Bihar, and Gujarat.”
The statement additionally mentioned that the company’s two fully automated manufacturing facilities, equipped with in-house cold storage, have a total capacity of over 1 lakh tonnes per annum.
“With a consistent revenue growth of 25% CAGR (compound annual growth rate) over the last five years, Pushp is evolving from a regional leader to a significant national brand,” the company said.
