On September 18, 2020, CCI approved MCPI Private Limited’s (‘MCPI’) acquisition of Garden Silk Mills Limited (‘GSML), through MCPI Polyester Private Limited, pursuant to proceedings under the Insolvency and Bankruptcy Code, 2016 (‘IBC’).^[1]

MCPI is part of the Chatterjee Group (‘TCG’) and is engaged in the business of manufacturing and supply of Purified Terephthalic Acid (‘PTA’). TCG is a strategic investor with investments in various sectors such as petrochemicals, biotech, real estate, technology, pharmaceuticals and financial services.

GSML, part of the Praful Shah Group, manufactures polyester yarn and textile products, which falls in the category of man-made fibres. GSML is engaged in the production and sale of: (i) polyethylene terephthalate (‘PET’) chips; and (ii) polyester yarn in India. It commercially supplies PET chips as well as captively consumes the same for manufacturing different kinds of polyester filament yarns (‘PFY’).

CCI observed that there were no horizontal overlaps. With regard to vertical relationships, CCI observed one between MCPI and GSML. MCPI was engaged in the manufacturing and sale of PTA in India (upstream market) and GSML utilizes this PTA, as a raw material to manufacture polyester (downstream market). CCI observed that at a narrower level, the market for manufacturing and sale of PTA could be sub-segmented into manufacturing and sale of: (i) PFY; and (ii) PET chips.

MCPI’s market share in the upstream market was between 15-20% (in terms of both installed capacity and actual production), and GSML’s market share in the broad segment of polyester was between 5-10% in terms of installed capacity, and between 0-5% in terms of total production. GSML’s market shares in each of the sub-segments were in a similar range.

CCI approved the transaction, noting that the parties did not have any ability or incentive to foreclose competition in any segment/sub-segment.

[1] Combination Registration No. C-2020/09/767