Mumbai: Tem-asek Holdings, Singapore's sovereign wealth fund, has agreed to buy a 4.9 per cent stake in India's Godrej Consumer Products for Rs6.85 billion (Dh489 million).
Godrej will issue 16.7 million new preferential shares to Baytree Investments (Mauritius), a unit of Temasek, P. Ganesh, executive vice-president of finance at Godrej Consumer, said. Godrej will sell the shares at Rs410 a share, the company said in an exchange filing.
Temasek, which managed S$193 billion (Dh558 billion) as of March 2011, has transformed itself from a holder of stakes in companies controlled by Singapore's government to an investor with more than two-thirds of its assets based abroad. Temasek has invested more in emerging markets including China, India, Brazil and Mexico, as developing nations led the global economy's recovery from its worst recession since the Second World War, according to its 2011 review.
Godrej Consumer's net income has more than quadrupled in the past three years amid rising consumer spending in the world's second-most populous nation. "The growth of the Indian consumer sector and good corporate governance of Godrej must have lured Temasek," said Arun Kejriwal, a director at Mumbai-based Kejriwal Research and Investment Services. "Godrej wants to be a leader in India as well as be aggressive in smaller emerging markets to diversify its risk."
Separately, Godrej will buy a 60 per cent stake in Chile's Cosmetica Nacional, it said in an exchange filing. The company will fund the deal, which it will complete by April, using "low-cost overseas debt," the company said in a statement.