Nobel NSE 1.69 % Hygiene, a manufacturer of disposable hygiene products, has raised around Rs 450-Rs 500 crore from investors led by healthcare-focused private equity fund Quadria Capital.

Quadria will own a significant minority stake in the company.

Sixth Sense Ventures, a domestic consumer-centric venture fund, will invest alongside Quadria, a senior company executive said.

The deal is a mix of primary and secondary capital where existing angel and PE investors including CLSA Capital Partners, Access India fund and its co-investors will exit.

In a separate announcement, Access PE said it had completely exited Nobel Hygiene.

Access PE had invested Rs 37 crore in 2013 for a 29% stake. It made a partial exit in 2015 when it sold 10.3% to CLSA. It has now sold the remaining stake to Quadria for Rs 191 crore, the fund said, clocking a more than 4x return on its initial investment.

Over two decades, Nobel Hygiene has built a business that has cornered a sizeable share of the disposable hygiene market in India.

Founded by Kamal Kumar Johari, the company today has over 50% market share in the adult disposable hygiene space. It has expanded its portfolio to also cater to baby and feminine hygiene products. The company makes the Friends brand adult diapers, Teddyy brand of baby diapers and sanitary pads for women.

The company has clocked year on year growth of 30% to close the financial year ending March 31 at a topline of Rs 600 crore, Johari said.

“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 company bought Godrej Consumer’s baby diaper brand Snuggy in 2019.

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 cofounder, Quadria Capital.

India significantly lags peers in the usage and adoption of personal and disposable hygiene products, a stark difference that was further accentuated with the devastating impact of the pandemic, he added.

The adult diaper industry in India is pegged at around Rs 500-Rs 600 crore while the baby diapers industry is said to be around Rs 6,000 crore and is growing at 25% compounded annual growth rate (CAGR) 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.

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.