As there was no synergy between his B2C and the other BOIL businesses, which were pure B2B, and as his cousins took control of the other businesses, he suggested separation of the family businesses, thus giving each business unit complete autonomy.

The BOIL board finally hived off its various businesses into subsidiaries in 1990. While this separation gave much-needed autonomy to Mariwala, it also left him starved of capital.

For a business with an annual turnover of Rs 80 crore, Mariwala was left with a paltry share capital of Rs 90 lakh, reserves of Rs 2.4 crore, and a debt of Rs 4.7 crore with which Marico needed to fund its working capital requirements. Among the new products created during this period, Marico launched Hair & Care (nonsticky hair oil) and Revive (cold water starch). In addition, higher advertising and promotional spending were undertaken in Sweekar. Finally, Marico pushed dealers to achieve stretch targets and rewarded them with foreign vacations—a first in the FMCG sector at that time.

Looking at the growing demand for Indian products among the Indian diaspora in the Middle East, Marico set up its first overseas office in Dubai in 1992.

All of these initiatives helped Marico deliver a healthy 28 percent CAGR in sales, taking its sales to Rs 350 crore by 1996 from Rs 80 crore in 1990. During this period, Parachute coconut oil increased its market share from 50 percent in 1990 to 55 percent in 1996, Saffola and Sweekar maintained their number two position in edible oils while Hair & Care captured a 22 percent share of the light hair oil market since its launch in 1991.

During this period, Marico’s ownership changed as Harsh Mariwala increased his stake in the business to 50 percent in 1996, from 25 percent until 1990. The remaining 50 percent was owned by his uncle, Kishore Mariwala. Marico also got the SIL brand of fruit jams in the family settlement, acquired from BOIL’s subsidiary, Kanmoor Foods Ltd.

Marico went public in 1996, pricing its shares at Rs 175 per share and raising Rs 63.4 crore. This reduced Marico’s debt to equity ratio, from 1.4 (FY91) at the time of the split with BOIL to 0.5 post- IPO. Besides, both net sales and profit after tax (PAT) started rising steadily from FY91 onward.

Taken from Unusual Billionaires book.