Case Study: Jyothy Laboratories

Abstract

This article analyzes a family-owned business, Jyothy Laboratories Limited, which is a fast-growing, family-owned company in India, with more than 1,000 employees and 16 factories. The company was founded in 1983 by M.P. Ramachandran, who also served as the chairman and managing director of the company. The article describes at what stages such companies seek investment and how the founders try to retain a controlling stake. In this case, the founder holds 69% stake even after the initial public offering (IPO). The author examines how private equity investors operate in this kind of situation and how they receive value from an investment in which they receive a minority stake, as well as the exit process for this sort of investment.

TOPICS: Private equity, emerging, equity portfolio management, analysis of individual factors/risk premia