On August 9, 2021, CCI approved the acquisition of 2.697% and 0.03% share capital of Bikaji Foods International Limited (‘Bikaji’) by Lighthouse India Fund III Limited (‘Acquirer 1’) and Lighthouse India III Employee Trust (‘Acquirer 2’), respectively.^[1] Acquirer 1 is a private equity fund sponsored by Lighthouse Funds, LLC (‘Lighthouse Funds’) and Acquirer 2 is a trust settled in India, that makes investments alongside Acquirer 1 based on investment decisions taken by Acquirer 1 under an existing co-investment agreement.

Lighthouse Funds held 7.472% equity shareholding in Bikaji through one of its private equity funds (‘Maharaja Fund’). Lighthouse Funds had and will continue to have the right to nominate one director to the board of directors of Bikaji, along with certain affirmative rights. Under the proposed transaction, equity shareholding of Lighthouse Funds and Acquirer 2 in Bikaji would collectively increase from 7.472% to 9.995% on a fully diluted basis. Acquirer 1 and Maharaja Fund will also obtain the right to appoint one observer to the board of Bikaji.

While assessing horizontal overlaps, CCI observed that one of the portfolio companies of Lighthouse Funds, i.e., Wow Momo Foods Private Limited (‘Wow Momo’) overlaps with the activities of Bikaji Food Junxon in the overall Quick Service Restaurant (‘QSR’) segment. Considering the limited presence of Bikaji in the QSR segment, CCI observed that the proposed transaction was unlikely to cause any AAEC in any plausible relevant market.

Similarly for vertical relationships, CCI noted that one of Lighthouse Funds’ portfolio companies, FSN E-Commerce Private Limited (‘Nykaa’), is an e-commerce platform primarily for cosmetic products as well as products such as protein and energy bars, breakfast cereals and other health foods under the category of ‘health and wellness’. However, there were no actual or potential vertical links between Nykaa and Bikaji. Further, CCI found that any potential link between these two companies is likely to be insignificant to cause any change in competition dynamics. Accordingly, CCI approved this transaction.

[1] Combination Registration No. C-2021/07/851.