NCLT gives green signal to the merger of Sesa Care: Dabur has a big stake in the Ayurvedic hair care market, its hold will be strengthened.

New Delhi. Dabur India Ltd, India’s leading fast-moving consumer goods (FMCG) and ayurvedic products manufacturer, has received a major regulatory success as part of its portfolio expansion. The National Company Law Tribunal (NCLT) has given formal approval to the overall plan of merger of Sesa Care Private Limited with Dabur India. After this statutory approval, Dabur’s position in the Indian personal care and hair care market is going to be more aggressive and stronger than ever.

In the Indian cosmetic and hair care industry, consumers are now preferring natural, herbal and therapeutic solutions over chemical-based products. Dabur has been dominating the hair oil market for decades with established brands like ‘Dabur Amla’, ‘Vatika’ and ‘Badam Oil’. However, Sesa Care has been recognized as a very popular and trusted brand in the premium and medicinal Ayurvedic hair oil category. After receiving the green signal from NCLT, Sesa Care’s entire products, manufacturing facilities, research and development (R&D) and supply network will now become part of Dabur India’s vast distribution network.

As per the statutory information and regulatory filings made by the company to the stock exchanges, the Tribunal has approved the Amalgamation after the approval of the related parties and creditors:

• Regulatory formalities completed: After the merger order is issued by NCLT, now the necessary documentary process will be completed with the Registrar of Companies (RoC), with which the effective date of the merger will come into effect.

• Integrated Operating Framework: Post-merger, the independent financial and operational responsibilities of Sesa Care will become an integral part of Dabur India’s balance sheet and supply chain.

• Cost and Operational Synergies: This integration will enable Dabur to achieve massive cost optimization in raw material procurement, manufacturing and logistics.

There is a clear divide in the Indian hair care market between normal cosmetic hair oils and medicated i.e. ‘problem-solving’ hair oils. Sesa Care’s main product ‘Sesa Ayurvedic Hair Oil’ is clinically proven for Ayurvedic treatment of problems like hair fall, dandruff and premature graying of hair:

• Heritage of Kshur Cuisine: Sesa’s formulation is based on traditional ‘Kshur Pak Vidhi’ (milk based extraction) with over 18 rare Ayurvedic herbs and sesame oil, which enjoys huge loyalty among the consumer segment.

• Expansion of medium and premium segments: While Dabur Amla primarily leads the mass and value-for-money segment, the addition of Sesa will give Dabur a direct entry and lead in the medium and premium therapeutic hair oil segment.

• competitive edge: This move will decisively help Dabur to rapidly increase its market share against bigger rivals like Marico, Emami’s ‘Kesh King’ and Hindustan Unilever (HUL)’s ‘Indulekha’.

Despite Sesa Care having strong brand equity and regional popularity, it was a financial challenge to independently reach rural and remote retail markets across India. Now Sesa will benefit from Dabur’s global and pan-India distribution infrastructure:

• Direct access to over 70 lakh retail outlets: Dabur’s wide distribution network extends to more than 70 lakh grocery and retail stores in the country. Sesa’s products will immediately find a place on the shelves of rural and semi-urban markets through this established channel of Dabur.

• Aggressive expansion on e-commerce and quick commerce: There is a sharp increase in demand for premium Ayurvedic products on digital and quick commerce platforms like Blinkit, Zepto, Instamart and Amazon in metros and tier-1 cities. Dabur is preparing to capitalize on this digital presence for Sesa.

• Global Export Gateways: Dabur has presence in more than 100 countries in the Middle East, Africa, America and Europe. Through this international network, it will become easier to export Sesa’s Indian Ayurvedic products to foreign markets.

Industry analysts believe that this merger is part of Dabur’s long-term strategy to adapt its core Ayurvedic and healthcare DNA to modern consumer needs. In the coming quarters, Dabur may introduce product lines (Line Extensions) in new categories such as shampoos, serums, hair masks and scalp treatments under the Sesa brand.

This strategic move by Dabur amid intense competition in the FMCG sector will not only accelerate its top-line and bottom-line growth, but will also establish the company as an undisputed leader in the medicinal hair care market.