Coimbatore-based auto component manufacturer Craftsman Automation Pvt Ltd is in talks with private equity investors to raise around Rs 85-100 crore. It will be a straight equity deal, two people with direct knowledge of the development said.
“The fund will pick up around 15 per cent stake in the company,” one of the persons said adding that Standard Chartered Mid-Market Mid-Cap Fund is the front-runner among other PE investors. The other two players in the race to invest in the company are Tano Capital and Everstone Capital.
Rahul Raisurana, managing director of the StanChart fund, refused to comment while S Ravi, MD of Craftsman Automation, denied that the deal was on. A senior official of Tano Capital also refused to comment on the development. A senior official of Everstone Capital declined to comment as well.
However, VCCircle has learnt that term sheets have been signed between the two parties and talks are in a fairly advanced stage.
Earlier in 2010, World Bank-backed International Finance Corporation had invested around Rs 162 crore in the company.
The company will use the latest round of funding to fuel its growth and expansion plans. According to one of the sources, it is looking to set up a new manufacturing facility for which the funds will be used. According to the company’s website, its projected sales turnover for the financial year ending March 2012 stands at Rs 600 crore.
Craftsman is an engineering company with a diversified business portfolio including original equipment manufacturing, contract manufacturing of assemblies and sub-assemblies for sectors like automotive, textiles, printing machines and locomotives, and manufacturing of industrial gears, hoists and marine products.
Launched in 1986, the company has 10 manufacturing units in Coimbatore, Chennai, Sriperumbudur, Pithampur and Jamshedpur. The company supplies its products to more than 34 customers in nine countries.
Craftsman also runs two joint ventures – Carlstahl Craftsman Enterprises Pvt Ltd and MC Craftsman Machinery Pvt Ltd, as well as two subsidiaries, Craftsman Marine BV and Craftsman Singapore Pte Ltd.