How investment of Rs. 4000 gave birth to an Indian MNC?

It all started on ??????????????????’?? ?????? when one of the promoters G. Ramakrishnan reaped his love for business & wrote a letter to his four friends.??

The letter was so compelling that all of them left their well-paying jobs. Their family & friends were shocked.?

They didn't have the business plan ready.

Being from a middle-class family with no job security, they were barely meeting their ends. Pressure from the families started to build.??

After various ??? ?? ?????, they decided to enter the manufacturing sector.?

G. Ramakrishnan used to work at ?????????????? before resigning.

He went back with his friend ??.?????????????? to meet the company’s manufacturing head & asked him if they could do something to meet the needs of Colgate?? (A stupid move you would think)?

Colgate people told, Why don't you manufacture Sodium Laureth Sulphate (SLES) TLS?

(Fun fact)

At that time, U. Shekhar didn't know what SLES was, so he just said ????????

They asked few people & found that its a chemical used in making shampoos & doesn’t need huge investment.?

U. Shekhar, being a chemical?engineer, read several books about the making of SLES.

He then got the required raw materials & started manufacturing in his friend's lab in City of Dreams (Bombay).??

After a few trials & errors, Colgate?said ?????? for their chemical.?

With bank loans & personal?investment of Rs. 4000 by each one, GALAXY SURFACTANTS was started in 1980.?

But this is not it.

We all know the entrepreneurial environment in the 80's vs now is not the same. It was a time of shortage – from finance?to raw materials???

• The bank's loan rate was 18-19%.
• The govt. had made it difficult to import raw materials.
• Excise duties of ~118% on shampoos??as it was under personal goods category. They were regarded as “luxuries” which are not meant for the poor Indian?population.?

However, the personal home care industry which had a lot of scope kept them going.??

They survived their tough times by staying focused on

?serving customers well

?constantly innovating and

?establishing international competence.?

Well time ticks by?& today, Mumbai-based Galaxy Surfactants has emerged as a ?????????????? ???????????????????????? of surfactants & specialty chemicals.

It is used as intermediate raw materials to produce home & personal care products touching the lives of billions of people.

The company caters to both local & global giants like???

It has acquired ?????????????????? ?????????????????? ???????????????? status from its clients?locally & globally?\?

This was made possible with heavy investments in R&D & innovations.

It gave the company a competitive edge over peers with 30+ ???????????????????????? ???????????????? and 80+ ???????????? registered under its name??

Let the numbers speak??

?7 facilities > 5 in India, 1 in Egypt, 1 in US

?1400+ clients

?Presence in 80+ countries

?For the past 5 years, the company's margin is increasing despite the increase in cost of raw materials.

?Given its long term partnerships with clients, the margins are sustainable??

?The topline may continue to grow with industry growth??

As per the past growth values, if we calculate the company's fair value by giving it 25x PE multiple, it is trading at a premium of 20%.

You can try your growth assumption in ticker's valuation calculator.

The company is focusing to grow by??

• Sale of high margin products
• R&D
• Entering?emerging markets

Let's see how it plays??

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