Asian private equity firm Creador has invested Rs 100 crore ($16 million) to pick up a minority stake in plastic water tank maker Vectus Industries Limited (Vectus). It is believed that the fund has picked up 20 per cent stake and valued the company at roughly $85 million.
This marks the fourth investment in India for Creador and the second since January 1 this year. It also marks the second investment out of its second PE fund which is being raised. Creador has mopped up $220 million from its target of $250 million for second fund and is sitting on $150 million dry powder.
Established in 2004 by Ashish Baheti and Atul Ladha, who have over two decades of experience in retail plastic products business, Vectus manufactures plastic water tanks and pipes. Its products and designs are sold under Vectus, Ganga and WaterWell brand names. It also offers PVC, CPVC, PPR and composite pipes and fittings under its brand.
Vectus’ products are largely consumed in the domestic plumbing and sanitation sector. It has 11 own manufacturing units and its products are sold across 4,000 dealers and distributors spread across India. For the financial year ended March 2014, Vectus achieved revenues of about Rs 400 crore ($66.7 million).
The proceeds from the fund will be used by the company to expand nationally. The company is planning to come up with two manufacturing units down south and a major portion of the fund will be used for that.
Brahmal Vasudevan, founder and CEO of Creador, said, “Creador is delighted to have this opportunity to partner with Ashish and Atul in shaping Vectus Industries’ next phase of growth. Both of them are passionate entrepreneurs who have developed Vectus Industries into a leading player in the water tanks and plastic pipes space with a broad range of products, strong brand and excellent distribution.”
“Going ahead we would like to pick up more stake in the company, like we did in Somany Ceramics,” Vasudevan said.
Talking about fundraising, Vasudevan said, “We have a target of $250 million for the second fund. Given the pepped up market sentiment post Modi win, we might end up mopping up roughly $300 million when we wrap up the fund in August this year.”
It is currently looking at some deals in Indonesia. In India, it plans to seal two-three deals per year in consumer segment.
Creador recently bought shares worth $2 million in Delhi-based tile manufacturer Somany Ceramics to take its total exposure to the company to $10 million. This investment was also through its new fund which has a target corpus of $250 million.
Its other investments in India include Cholamandalam Investment & Finance and Repco Home Finance. Both these were made out of the firm’s maiden fund.
(Edited by Joby Puthuparampil Johnson)