India-focused investment fund Malabar Investments is considering a stake acquisition in Mumbai-based Sugar Cosmetics worth Rs 80-100 crore in a secondary transaction, The Ecoomic Times exclusively reported citing its sources.
If finalised, the deal could value Sugar Cosmetics at about Rs 2,900 crore (approximately $350 million). This transaction might also involve partial exits from early investors like RB Investments and India Quotient, along with some angel investors and family offices.
Sugar Cosmetics aims to bring Malabar Investments on board as an investor, particularly as the company eyes an eventual initial public offering (IPO), as per the report.
“Malabar Investments coming in could pave the way for other pre-IPO investors to also come in… the broader contours are being finalised,” the report added quoting the person in know. “A term sheet has been prepared but the proportion of which investor gets what exit is still being decided.”
According to Tracxn data, RB Investments, an early backer since 2017, holds over 10 per cent stake in Sugar Cosmetics, while India Quotient holds approximately 11 per cent. If the deal goes through, it would mark another consumer company addition to Malabar Investments' portfolio.
Founded by former McKinsey executive Sumeet Nagar, Malabar Investments has previously supported consumer-focused start-ups like Boat, Bombay Shaving Company, and Ixigo, primarily targeting small and mid-sized public companies.
Sugar Cosmetics, launched by Vineeta Singh and Kaushik Mukherjee, initially operated as an online-first direct-to-consumer (D2C) beauty brand before expanding into offline channels. Tracxn data indicates that the co-founders hold a combined 25 per cent stake, while A91 Partners holds 20.8 per cent.
Elevation Capital, an early-stage venture firm, owns an 11 per cent stake. Other investors include L Catterton, which led a $50 million funding round in May 2022, along with Anicut Capital and family offices of Pawan Munjal from Hero Group and Ajay Shriram from DCM Shriram.
