Startup Deep Dive : Mother Sparsh – a Rs 1 crore retail flop that ended in an ITC buyout

Mother Sparsh, a baby-care label that began with a Java developer’s irritation at chemical-heavy wipes, now books ₹99.9 crore (about $10.4 million at ₹96 to the dollar) in annual revenue for the year ended March 2025, up 70.1% from ₹58.8 crore the year before, as reported in its financial filings. For most of its first five years it ran on nothing but its founders’ own savings, and on one retail bet that cost it roughly ₹1 crore.

That contradiction is the whole story. A couple who had never run a business lost a chunk of their capital trying to force their way onto shelves next to Johnson & Johnson and Himalaya, then rebuilt around a slower, sampling-led strategy that Indian FMCG major ITC found compelling enough to buy into in 2021 — and is still buying, tranche by tranche, five years on.

Quick facts

What they do

Mother Sparsh makes natural and ayurvedic personal-care products for babies and mothers, sold under a single D2C-first brand. Its anchor product is a 99% pure-water baby wipe with no soap, perfume or added chemicals — pitched as a modern version of the cotton-and-water cleaning that Indian households used before commercial wipes arrived. Around that anchor it has built out a wider basket: a hing-and-saunf colic relief roll-on, a turmeric after-bite balm, plant-based bottle cleanser and laundry detergent, an unscented skincare line for sensitive skin, and children’s oral care. The buyer is, overwhelmingly, first-time Indian parents shopping online, on marketplaces, and increasingly through pharmacies and modern trade as the brand has scaled beyond its early D2C base.

The origin

The idea did not come from a lab or an accelerator. Rishu Gandhi was working as a Java developer at Infosys when a colleague complained that the polyester wipes she used on her baby were causing rashes. Rishu began digging into the baby-care aisle and found it dominated by wipes loaded with synthetic fragrance and preservatives, marketed as gentle but rarely tested that way. Her husband, Himanshu Gandhi — an engineering graduate of YMCA Faridabad with an MBA from the Fore School of Management, Delhi, then working in a government role in Haryana — left that stability to build the product with her. The company was incorporated on 5 February 2016, but the founders spent close to two years on formulation before the first wipes shipped, chasing something closer to the plain cotton-and-water routine older Indian generations used on newborns than to anything already on a retail shelf. It started, by their own account, on an initial outlay of about ₹10 lakh.

The struggle years

The first hard lesson came from retail, not product. Once the wipes were ready, Rishu Gandhi tried to buy her way onto shelves in Gujarat and Rajasthan, spending close to ₹1 crore on marketing and shelf space to compete directly with entrenched players such as Himalaya, Johnson & Johnson and Chicco. It did not work: a new, unknown brand could not out-market incumbents with decades of distribution and recall, and the money was largely lost. Rishu Gandhi later described it as her most expensive lesson in the business.

• Post-launch (2016-17): near-total dependence on founders’ own capital, with no institutional funding for the first five years of operation.
• Circa 2017-18: roughly ₹1 crore spent on a general-trade push into Gujarat and Rajasthan that failed to convert into sales against established baby-care brands.
• 2018-19: pivot to a sampling-led strategy — distributing free wipes through hospitals and new mothers rather than fighting for shelf space — after which the brand said it was moving roughly ₹40-45 lakh a month in on-counter and online sales, about ₹3.5 crore annualised.

The recovery was slow and unglamorous: rebuild trust product by product, city by city, mostly online, before trying general trade again on the brand’s own terms.

The turning point

The turning point was not a viral moment but a balance-sheet one. By FY 2020-21, the company had scaled unit sales roughly five-fold year on year — from about 3 lakh units in FY20 to about 1.5 million units in FY21 — and had 42 products live across 23 states, mostly through its own site, Amazon, Flipkart, FirstCry and Nykaa. On the back of that trajectory, ITC — India’s largest listed cigarettes-to-cornflakes conglomerate looking to build a personal-care D2C portfolio — agreed in November 2021 to buy a 16% stake in Mother Sparsh for ₹20 crore, its first outside institutional money in five years of operation. That single cheque reframed the company from a scrappy D2C wipes brand into a validated bet inside one of India’s largest FMCG groups, and every stake increase since has built on it.

The money behind it

Mother Sparsh’s funding story is unusual: almost all of its outside capital has come from one strategic investor, buying in in stages rather than through the usual venture-round ladder.

• November 2021: ITC agrees to acquire a 16% stake for ₹20 crore, its first institutional cheque, five years after incorporation.
• By 2022: ITC raises its holding to about 22% with a further ₹13.5 crore, as reported by Inc42.
• April 2025: ITC discloses a plan to lift its stake from 26.5% to 49.3% via an additional ₹81 crore, taking its cumulative investment to roughly ₹126 crore, with a stated intent to acquire the remainder over two to three years.
• May 2025: one tranche of that plan completes — 594 equity shares bought on the secondary market plus 2,201 compulsorily convertible preference shares subscribed afresh, taking ITC’s stake to 39.47% for about ₹50.6 crore, executed fully in cash and flagged as a related-party transaction given ITC’s existing holding.
• Beyond ITC, a small number of angel investors — including Yash Pal Gandhi — hold minority positions; no independent venture fund has led a round in the company.

No formal valuation for Mother Sparsh has been disclosed in any of the ITC filings reviewed for this piece, so none is stated here.

How it makes money

The model is direct-to-consumer retail economics rather than a marketplace or subscription business: Mother Sparsh designs and brands the products, contracts manufacturing to third parties, and sells at retail prices across its own website, e-commerce marketplaces, pharmacies and general trade, keeping the gap between manufacturing cost and shelf price as margin.

• Money in: direct sales at MRP through its own website and app, third-party marketplaces (Amazon, Flipkart, FirstCry, Nykaa), pharmacy and modern trade, and general trade counters.
• Costs out: contract manufacturing (its wipes and related products are made at a third-party unit in Ludhiana, with raw material sourced largely from Gujarat), marketing and sampling spend, marketplace commissions, and logistics.
• Where the margin sits: ratio analysis of the FY25 MCA filing shows an operating margin of about 14.1% and a net margin of about 6.4% — thin by branded-FMCG standards but positive, unlike many venture-funded D2C peers still burning cash for growth.
• The part people get wrong: because it sells “natural” and “ayurvedic” positioning, outsiders assume premium pricing carries premium margins; in practice, contract manufacturing and heavy marketplace and sampling spend keep gross-to-net margin compression high, which is part of why ITC’s scale and supply-chain muscle is attractive to the founders.

The numbers

Mother Sparsh’s revenue, as reported in its Ministry of Corporate Affairs filings (unit: ₹ crore):

Two things worth flagging on that table. First, ITC’s own November 2021 disclosure put FY21 turnover at ₹15.44 crore, while a founder interview the same year cited a rounder ₹22 crore for the same period; this piece uses the exchange-disclosure figure because it traces to a filing rather than a founder estimate, but both are recorded here since they conflict. Second, Mother Sparsh does not separately publish profit or loss; the only disclosed profitability marker is the FY25 net margin of 6.36% referenced above, from which an approximate net profit of roughly ₹6 crore can be inferred — an inference, not a filed figure. Separately, the company told trade press in April 2025 that its annualised revenue run rate had crossed ₹110 crore, ahead of the FY25 filed number, which is normal for a business still compounding through the year.

Where the money comes from

Mother Sparsh does not publish a formal segment or geography breakdown, but its own disclosures to press give a channel picture, most recently detailed for FY21 in a founder interview:

• Own website and app: about 35-40% of sales (FY21, company-stated).
• E-commerce marketplaces (Amazon, Flipkart, FirstCry, Nykaa): about 50% of sales (FY21, company-stated).
• General and modern trade, including pharmacies: about 10% of sales at the time (FY21, company-stated), a share the company has said it wants to grow as it pushes into premium baby stores and new-age pharmacy chains.
• Geography: presence across 23 states as of 2021, sold pan-India rather than concentrated in one region, per the same interview.

The surprise is less about geography than about channel mix: for a brand that grew up on hospital sampling and word of mouth, half its revenue by FY21 was already running through third-party marketplaces rather than its own site — meaning Mother Sparsh pays marketplace commission on a large share of the business it built.

The risks

• Category crowding: the natural baby-care aisle now includes Himalaya, Johnson & Johnson, Mamaearth, Pigeon and Mothercare, several with far larger marketing budgets — the same competitive set that consumed Mother Sparsh’s ₹1 crore retail push in its early years.
• Manufacturing concentration: the company’s flagship wipes and related lines are made at a single third-party facility in Ludhiana with raw material sourced largely from Gujarat, so a disruption at either point directly hits supply — a risk the founders themselves flagged during the COVID-era input-cost and logistics disruptions of 2021.
• Ownership transition: ITC’s stated plan to move from 26.5% to 49.3% and eventually full ownership over two to three years means founders are progressively ceding control of strategy and brand direction to a listed conglomerate, with each tranche formally disclosed as a related-party transaction.

The takeaway

The instructive part of Mother Sparsh’s story is not the ITC deal — plenty of Indian D2C brands eventually sell to a strategic buyer. It is what happened before that deal was even possible: five years without outside capital, one expensive and clearly named failure in general trade, and a deliberate retreat into a slower, sampling-led way of building trust with new mothers instead of trying to out-market bigger rivals on their own turf. The lesson that travels is not “raise money early” or “get acquired” — it is that a costly, well-understood mistake, honestly priced at about ₹1 crore, can be more useful to a founder than an early round that lets the same mistake happen with someone else’s money.

Frequently asked questions

Who founded Mother Sparsh and when?

Mother Sparsh was incorporated on 5 February 2016 by Himanshu Gandhi and Rishu Gandhi, a husband-and-wife team; Rishu had worked as a Java developer at Infosys and Himanshu had held a government role in Haryana before they left to build the brand together.

What does Mother Sparsh actually sell?

Natural and ayurvedic baby and mother care products, built around a 99% pure-water baby wipe, and extended into colic-relief roll-ons, after-bite balm, sensitive-skin skincare, laundry detergent and children’s oral care.

Has ITC fully acquired Mother Sparsh?

Not yet, as of the disclosures reviewed for this piece. ITC held 39.47% as of May 2025 after a phased purchase, with a stated plan to take that to 49.3% and then acquire the rest over two to three years; full acquisition had not been confirmed as completed as of the sources checked.

How much revenue does Mother Sparsh make?

Its financial filings put FY25 (year ended March 2025) revenue at ₹99.9 crore, up 70.1% from ₹58.8 crore in FY24; the company separately told press in April 2025 that its annualised run rate had crossed ₹110 crore.

Is Mother Sparsh a listed company?

No. Mother Sparsh Baby Care Private Limited is unlisted; its anchor investor, ITC Limited, is listed on the NSE and BSE, which is why ITC’s stake purchases in Mother Sparsh are disclosed as stock-exchange filings even though Mother Sparsh itself is not traded.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Business Standard, November 2021 – “ITC to acquire 16% stake in D2C brand Mother Sparsh for Rs 20 cr” (incorporation date, FY21 turnover of ₹15.44 crore, deal terms).
• YourStory, May 2021 – feature on Mother Sparsh’s growth, founders’ backgrounds, unit and channel-split figures for FY21.
• YourStory (SMBStory), accessed September 2026 – feature on the ₹1 crore retail loss, the sampling-strategy pivot and early monthly revenue figures.
• Indian Retailer, 2021 – founder interview on distribution channels, FY21 revenue estimate, expansion plans and COVID-era supply chain risk.
• Inc42, company profile, accessed September 2026 – funding history including the 2022 stake increase to 22% for ₹13.5 crore, revenue figures.
• Inc42, 18 April 2025 – “ITC To Increase Stake To 100% In Mother Sparsh” (stake and investment figures, founder and ITC executive quotes).
• ThePrint, 19 April 2025 – “ITC to acquire Mother Sparsh in next 2-3 years, increases its stake to 49% by additional investment of INR 81 crore.”
• HDFC Sky, 21 May 2025 – “ITC Raises Stake in Mother Sparsh to 39.47% with Rs 50.6 Crore” (deal structure, share and preference-share split).
• Tofler, company financial profile, accessed September 2026 – FY25 margin ratios (gross, operating and net margin, ROCE).
• StartupTalky, company profile, accessed September 2026 – founders’ educational and career backgrounds, funding timeline, manufacturing location, competitor set.
• DNA India, April 2025 – feature on Mother Sparsh’s product range and customer reach.

Found an error? Write to us and we’ll correct it in the open, dated, on the piece.