Gaji Mercantile Pvt. Ltd, a special purpose vehicle floated by three entrepreneurs, has acquired Bharat Wire Ropes Limited, a leading manufacturer of Steel wire ropes, sources directly involved in the transaction told VCCircle. The deal values Bharat Wire Ropes at Rs 200 crore.
Bharat Wire Ropes, a closely-held company promoted by Sunderji Shah & Devchand Shah four decades back, claims to be the second largest manufacturer of wires in India after Usha Martin Ltd.
The wire ropes manufactured by the company are used in critical applications in industries like oil & gas, shipping, mining, railways, electrical transmission etc. The firm, which counts Kone Elevators, Bajaj Electricals and Suzlon as its top clients, enjoys a monopoly in some of its product range, especially for the Railways. The company claims to enjoy the “approved vendor” status to almost all major government and private companies using steel wire ropes.
The company clocked a turnover of Rs 90 crore during the last year and has grown with a CAGR of 23% in the past three years. With the current order book position of around Rs 100 crore, the company is targeting Rs 150 crore in the current fiscal.
Mumbai based investment bank Singhi Advisors were the sole advisors to the transaction.
Gaji Mercantile is an SPV formed solely for the purpose of this acquisition by three first generation entrepreneurs who have prior experience in trading and markets. This acquisition also marks the partners’ foray into the manufacturing iness. Gaji will also invest Rs 500 crore on a greenfield expansion with a state-of-the-art manufacturing facility for the company.
"Gaji Mercantile is formed by a group of financial investors who are first generation entrepreneurs and who though not directly involved in the steel wire rope manufacturing are well aware of the business & the market opportunities. Gaji is an SPV formed by the promoters to acquire Bharat Wire Ropes. With this acquistion, they foray into the manufacturing business and are suitably positioned to grow the business further ", Sapna Seth, VP, Singhi Advisors told VCCircle.
One of the partners, Sunil Dangi of Gaji said, "We intend to make this company grow to Rs 300 crore in two years. Looking at the huge demand in all its user industries, in India & abroad, we are confident that we can easily achieve these levels of turnover. Bharat Wire has pioneered some of the designs in wire ropes and we shall continue with the development and aggressively reach out in the market.”
Bharat Wire’s client comprises of 13% export sales and nearly 40% sales to various government/ nodal bodies such as the Army, Navy, Airforce, Railways, Port Trusts, Electricity Boards and PSUs like BHEL, NTPC, ONGC, BEML, SAIL, Shipping Corporation etc.