Will Good Glamm’s global gambit pay off ?
depend heavily on discounts,” said Red Seer Consulting’s Agarwal.
THORNY INTEGRATION
Amid the push for profitability, Good Glamm is also in litigation with some of its shareholders over unpaid dues, something it needs to resolve ahead of its public listing.
Last month, it entered into an arbitration with the Indian Angel Network (IAN), one of the shareholders in Sirona Hygiene, in which Good Glamm had acquired a majority stake in 2021. Weeks earlier, three shareholders—IAN, the founders of Sirona Hygiene and NB Ventures—served a default notice on Good Glamm for unpaid dues related to the 2021 Sirona acquisition.
At the time, Good Glamm had paid around ₹100 crore to acquire a stake of 60-70% in Sirona Hygiene, with the remainder to be acquired in tranches over the next two years. Initially, the tranche due to be paid out in 2022 was deferred to 2023. In the early months of 2024, three shareholders of Sirona Hygiene triggered the ‘put’ clause, which allowed them the right to sell the rest of their stake to Good Glamm. However, both Good Glamm and the shareholders are now claiming a default.
“There has been legal back and forth...they are digging up old contracts and making farcical allegations so that they don’t have to pay us,” said one of the shareholders, asking to remain anonymous.
Good Glamm, however, said in a statement that it was contractually compliant.
The founders of Moms Co. and the company are also in litigation over the remaining 10% stake that Good Glamm needs to acquire. Separately, Good Glamm has negotiated a later payment deadline with the founders of Organic Harvest to acquire the 49% stake in that company that it does not own (Good Glamm had acquired 51% in 2022).
A Good Glamm spokesperson said that the company has not defaulted on any of its obligations to Organic Harvest.
One founder also acknowledged unpaid dues related to the acquisition but declined to be identified. “The company has taken a call that it needs to focus more on the business as opposed to paying off dues,” the founder said.
Several founders Mint spoke to are of the view that Good Glamm has scaled the acquired businesses and benefited from the acquisitions, so it is only fair that the dues are fully paid.
With all these problems simmering in the background, the company is gunning for a public listing next year. Clearly, if it is to get there, Good Glamm will need to stabilize its domestic business, scale international revenue, resolve all outstanding issues, and soothe its shareholders.
ranjani.raghavan@livemint.com