"We are eyeing acquisitions in the hair-colour and household insecticides segments in which we are very strong. We hope to seal a transaction in each segment in the next two quarters," GCPL's Chairman, Adi Godrej, told reporters. The company already has a few companies on its radar and is in the process of shortlisting them for acquisition, he said. The target companies would be from the developing world of Asia, Africa or Latin America, he said.
The first round of funding for the acquisition would be through debt while further acquisitions would be funded through either equity or debt or both, he said. "There could be a QIP or an issuance of warrants," Godrej said, ruling out a GDR issue and follow-on public offer (FPO). GCPL has recently obtained its Board approval to raise up to Rs 3,000-crore for funding its inorganic growth.
Godrej expressed satisfaction with the company's performance in Q3 FY 10 when its sales revenues (net of excise) increased 53 per cent to Rs 518-crore and PAT more than doubled (up 112 per cent) at Rs 85-crore. "Our brands fared very well, our marketshare improved and raw material costs remained benign. Besides, our cost-cutting initiatives had a positive impact," Godrej said.
In Q4 too, the GCPL Chairman expected raw material costs to continue to remain benign. On likely challenges, Godrej said that high food prices could result in low-income urban households having less to spend on consumer or FMCG goods. "Though this will be a factor, I don't expect it to seriously impact our bottomline," he said.