en.Wedoany.com Reported - Investor interest in India's beauty and personal care sector is extending from end brands to contract manufacturing, with a number of family-run or bootstrapped contract manufacturers attracting institutional capital.
According to sources, Naturis Cosmetics, which manufactures for brands such as Pilgrim, Plum, Nykaa's Kay Beauty, and Innovist's Bare Anatomy, is in talks with Sharrp Ventures and several domestic family offices to raise between Rs 800 million and Rs 1 billion. In April, the private equity arm of JM Financial invested Rs 1.5 billion in NG Electro Products, which produces gels, creams, and other personal care products for D2C startups and established fast-moving consumer goods companies.
Investors note that the rapid expansion of emerging brands and their increasing reliance on outsourcing are making contract manufacturers a parallel investment theme in India's beauty ecosystem. A growth equity investor who has evaluated some of these deals said that D2C brands are generally built on the premise of being asset-light and rapidly scalable, and the contract manufacturing ecosystem is a key link in this model. Investing in contract manufacturing offers a way to bet on the broader ecosystem without over-concentrating on consumer-facing brands. As of Tuesday's close, inquiries sent to Naturis Cosmetics CEO Rahul Tandon and Sharrp Ventures Managing Partner Rishabh Mariwala had not been answered. The Jammu-based profitable company is estimated to have generated revenue of Rs 2.5 billion to Rs 3 billion in the last fiscal year.
Ashish Dhir, Senior Director of Consumer and Retail at market intelligence firm 1Lattice, said the emergence of funded contract manufacturers strongly indicates that India's beauty and personal care ecosystem is entering its next phase of maturity. In the early stages of category development, investor capital was typically concentrated on consumer-facing brands; as the market scales up and becomes more complex, investment begins to flow into the broader value chain, including manufacturing, R&D, product development, packaging, and supply chain capabilities. According to 1Lattice's forecast, driven by wealth growth, increased awareness, and channel penetration, India's online beauty and personal care market is expected to grow from $6 billion in fiscal 2025 to $13 billion in fiscal 2030.
The growing investor interest in contract manufacturers also coincides with large companies increasing local production. According to 1Lattice data, multinational corporations such as French beauty giant L'Oréal India manufacture approximately 95% of their products sold locally. The sector has also seen a series of mergers and acquisitions, such as L'Oréal's recent acquisition of Gurgaon-based Innovist at an estimated valuation of around Rs 41 billion, and Hindustan Unilever's earlier acquisition of a majority stake in skincare brand Minimalist for nearly Rs 30 billion. Dhir added that as beauty categories become more fragmented and trend cycles shorten, the ability to rapidly develop and scale new products is becoming increasingly important. Contract manufacturers that can offer formulation support, innovation capabilities, quality assurance, and regulatory compliance are likely to benefit from this trend.
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