Blackstone sells 23% stake in Essel Propack for Rs 1,861.5 crore

Essel Propack strengthens performance under new management

Essel Propack
Oral care is Essel’s core segment Photo: Essel Propack

On 18 September 2020, US-headquartered equity investor and asset manager Blackstone divested 23% of its 75% holding in Essel Propack. It acquired 75% of Essel Propack on 22 August 2019, for US$ 470 million at Rs134 per share, from its earlier promoters Essel Group and the public. The sale at Rs. 256.50 a share brought Blackstone approximately Rs 1,861.5 crore or US$ 252 million. Thus Blackstone has recovered 53.6% of its investment back for divesting only 30.66% of its shareholding in Essel Propack. Blackstone will continue to own 52% of the company and has said it has no further divestment plans.

Blackstone said, “Within 13 months of investment, Blackstone has returned US 252 million by selling 23% of the company’s shares at Rs 256.5 per share. This implies a 106% IRR / 2.2x Multiple of Money in USD on Blackstone’s equity, net of debt at Holding company.” Since the acquisition, Blackstone has brought in a new CEO and other senior executives and launched a productivity improvement program that has helped bring about a 170 bps expansion of margins and 400 bps of ROCE improvement.

Apparently, the shares were sold to create liquidity in the stock, given significant investor interest after the company’s strong performance. The 23% shareholding represented those acquired in the open offer and have been sold back to local and global investors. Institutional investors who purchased the 23% shares included Axis MF, IDFC MF, Aditya Birla Sun Life MF, Nomura, Franklin Templeton MF, DSP MF, Government Pension Fund Global, and Neuberger Berman.

Packaging South Asia — resilient, growing and impactful — daily, monthly — always responsive

The multi-channel B2B in print and digital 17-year-old platform matches the industry’s growth trajectory. The Indian, South Asian, Southeast Asian, and Middle East packaging industries are looking beyond the resilience of the past three years. They are resuming capacity expansion and diversification, with high technology and automation in new plants and projects.

As we present our 2024 publishing plan, India’s real GDP growth for the financial year ending 31 March 2024 will exceed 6%. The packaging industry growth will match the GDP growth in volume terms and surpass it by at least 3% in terms of nominal growth allowing for price inflation in energy, raw materials, consumables, and capital equipment.

The capacity for flexible film manufacturing in India increased by 45% over the past four years. With orders in place, we expect another 20% capacity addition in 2024 and 2025. Capacities in monocartons, corrugation, aseptic liquid packaging, and labels are grown similarly. As the consumption story returns over the next six months, we expect demand to return and exceed the growth trajectory of previous years. The numbers are positive for most of the economies in the region – and as shown by our analytics, our platform increasingly reaches and influences these.

For responsible and sustainable packaging, with its attendant regulations and compliances, there is significant headroom to grow in India and the region. Our coverage includes the entire packaging supply chain – from concept to shelf and to waste collection, sorting, and recycling.

We target brand owners, product managers, raw material suppliers, packaging designers and converters, and recyclers. This is a large and complex canvas – the only thing that can work is your agile thinking and innovation together with our continuous learning and persistence.

The coming year looks to be an up year in this region, and this is the right time to plan your participation and marketing communication – in our rich and highly targeted business platform with human resources on the ground. Share your thoughts and plans to inspire and mobilize our editorial and advertising teams!

For editorial — for advertisement and for subscriptions

– Naresh Khanna (25 October 2023)

Subscribe Now
unnamed 1


Subscribe to our Newsletter


Please enter your comment!
Please enter your name here