Reckitt Benckiser, which bought Paras Pharmaceuticals last year in one of the largest deals in the Indian FMCG space, is set to sell the latter's personal care business.
Sources say Reckitt, which makes Lizol and Dettol, has asked JP Morgan to find a buyer for the business.
While J P Morgan is yet to formally approach the interested players, people familiar with the development say companies that are interested include Emami and Dabur. JPMorgan had advised Reckitt on the Rs 3,260-crore (Rs 32.6 billion) Paras deal.
The valuation of the personal care business is not clear yet.
Reckitt, according to sources, is keen to focus on Paras' healthcare business, which is the larger of the two with annual sales of Rs 300-350 crore (Rs 3-3.5 billion).
The personal care business, with brands such as Recova, Setwet, Zatak, Borosoft and Livon, has sales of Rs 100 crore (Rs 1 billion).
Harsh Agarwal, director, Emami, said his company would be interested.
"We have been interested in Paras. If the business is up for sale, we will consider it," he said.
P D Narang, group director, Dabur India, said, "There are synergies between us and Paras. While we will be interested if the business is up for sale, we haven't taken a decision yet," he said.
A Reckitt spokesperson declined comment.
A mail to Reckitt Benckiser India chairman & managing director Chander Mohan Sethi was not answered till the time of going to press.
A JP Morgan spokesperson refused comment.
For Reckitt, healthcare is important because of strong over-the-counter brands such as cold reliever D'Cold, foot cream Krack, pain reliever Moov, anti-fungal creams Itchguard and RingGuard, and prickly heat powder Dermicool.
"It's the OTC portfolio that Reckitt is keen to expand. In Paras, compared to personal care and consumer brands, the healthcare portfolio will have more traction. Its brands, from Moov to D'Cold to Krack, have been category changers.
"For Reckitt, this is the best route to grow after Disprin and Strepsils," says a Mumbai-based FMCG analyst.
According to people in the know, Reckitt is free to sell any business of Paras. Girish Patel, former chairman of Paras Pharmaceuticals, says, "As far as I know, there is no lock-in period that prevents Reckitt from selling a part of the business. It is free to do what it wants with it."
Like Paras, Reckitt has a combination of OTC and FMCG products in India.
The 75-year-old antiseptic liquid, Dettol, contributes nearly half of Reckitt's Rs 2,000-crore (Rs 20-billion) turnover.
Its household products include Harpic, Lizol, Colin, Mortein, Vanish, Easy Off Bang, Air Wick and Finish, while OTC brands include Disprin, Clearasil and Strepsils.