German banking major Deutsche Bank is picking up a 20% stake Mumbai-based Rama Cylinders for Rs 84 crore. Rama is a high-pressure cylinder manufacturer and the deal values the company at Rs 420 crore, reports Economic Times.
The deal involves issue of around 60 lakh equity shares and warrants to Deutsche Bank. While the bank would buy 45 lakh shares in Rama Cylinders, the remaining stake would be bought over after conversion of around 15 lakh warrants into equity shares.
There has been some private equity interest in this space before. Mumbai-based Everest Kanto Cylinders raised $22.5 million from two private equity funds, TVG Capital Partners and CLSA Private Equity Management, in 2007. The company is a listed entity and makes cylinders for industrial, medical and CNG industry. Everest Kanto presently has a market capitalisation of around Rs 1,340 crore.
Rama Cylinders was incorporated in 2004 and is promoted by Vashu J. Ramsinghani. The company has an installed capacity of 300,000 nos. /year of high pressure seamless steel cylinders and allied products such as vessels, accumulators etc. It manufactures high-pressure
seamless cylinders, seamless pressure vessels and seamless accumulator shells. The cylinders manufactured are used for medical gases, beverages, scuba diving, etc.
The company exports its cylinders to countries like Iran, Pakistan, Bangladesh, Thailand, Russia, Malaysia, Armenia, Russia, and also to major automobiles OEMs Such as Tata Motors & Bajaj Auto.
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