Gujarat-based sanitary products making company Cera Sanitaryware Ltd has agreed to float a joint venture in partnership with Anjani Tiles Ltd for setting up a ceramic vitrified tiles facility at Nellore in Andhra Pradesh, according to a stock market disclosure.
The project, which will start production of tiles in 2016, will require an initial investment of Rs 68 crore (approximately $10.5 million) to be funded with a mix of debt and equity – Rs 36 crore (about $5.5 million) as equity and remaining through long-term debt.
Cera will pick 51 per cent stake in the proposed JV which is estimated to cost it around Rs 18.36 crore ($2.8 million). Anjani will infuse Rs 17.64 crore ($2.7 million) for remaining 49 per cent stake.
The project will have an initial capacity of 10,000 square meters per day of tile production with a possibility for expansion.
Incorporated in April 2015, Anjani Tiles is based in Andhra Pradesh.
On the other side, founded in 1980, Cera Sanitaryware offers sanitary products which include ceramic sinks, wash basins, wash basin pedestals, baths, bidets, water closet pans, flushing cisterns, urinals, shower panels, shower cubicles, bath tubs, shower temples, whirlpools and sanitary fixtures.
The firm also trades in bathroom accessories. Besides, it generates non-conventional wind power.
For the September quarter 2015, Cera Sanitaryware clocked a 13 per cent growth in its sales to Rs 225 crore and a 14 per cent increase in its net profit at Rs 18 crore.
Early this year, the company raised around Rs 70.6 crore ($11.5 million) from Lighthouse Funds' second private equity fund through a preferential allotment. It also counts Westbridge Capital and Nalanda Capital as its shareholders.