Mumbai based Nobel Hygiene, a manufacturer of disposable hygiene products, has raised between Rs 450 and Rs 500 crore from investors led by Quadria Capital, a healthcare-focused private equity fund.

Quadria will hold a substantial minority stake in the company.

According to a senior company executive, Sixth Sense Ventures, a domestic consumer-focused venture fund, will invest alongside Quadria.

They have a strong presence and market share in India's Personal Care Market, with brand names like FRIENDS & TEDDYY that are synonymous with quality and dependability. They have a national presence through our network of stockists, dealers, and retailers.

The transaction is a mix of primary and secondary capital, with existing angel and private equity investors such as CLSA Capital Partners, Access India Fund, and its co-investors exiting.

In a separate announcement, Access PE stated that it had exited Nobel Hygiene entirely.

Kamal Kumar Johari founded the company, which now has a market share of more than 50% in the adult disposable hygiene space. It has expanded its product line to include baby and feminine hygiene products. The company manufactures adult diapers under the Friends brand, baby diapers under the Teddyy brand, and sanitary pads for women.

According to Johari, the company grew by 30% year on year to close the fiscal year ending March 31 with a topline of Rs 600 crore.

“We have seen a healthy traction during the pandemic…Our bottom line is healthy, and the company continues to be profitable,” he said. “We will look at achieving around Rs 1,000 crore in revenues by FY23.”

Johari added: “We will opportunistically look at inorganic growth opportunities.”

The Indian diaper market is expected to grow faster in the coming decade with an ageing population and increased life expectancy giving the industry a fillip.

“With hospitals business in India itself growing at 17% CAGR, the chronic illness patients comprise more than 50% of them as against those with acute illness and hence the adult diaper market is set to grow manifold from here,” said Amit Varma, managing partner, and co-founder, Quadria Capital.

The adult diaper industry in India is estimated to be worth around Rs 500-Rs 600 crore, while the baby diaper industry is estimated to be worth around Rs 6,000 crore and has grown at a compounded annual growth rate (CAGR) of 25% over the last five years.

“The Indian diaper industry offers a strong potential with penetration in low single-digit and the product promising frequency and a long consumer lifecycle (large and sticky category),” said Nikhil Vora, founder, and CEO of Sixth Sense Ventures.

Established in 2000, Nobel has maintained its dominance in the adult diaper segment and with domestic brands gaining preference, “we believe this leadership will be further strengthened,” he added.