Henderson Asia Pacific Equity Partners has sold a little over a quarter of its 12.49% stake in sanitaryware products maker Hindustan Sanitaryware & Industries Limited (HSIL) at an estimated 2.2x on its five year old investment.
Henderson had invested Rs 52 crore through convertible debentures in July 2005 and on conversion into equity held 14.99% in the company with an average cost of acquisition of Rs 64.1 per share. This stake came down to 12.49% after the recently concluded QIP issue of HSIL, which raised Rs 150 crore.
It sold 2.2 million shares at a price of Rs 141.65 on Wednesday pocketing Rs 31 crore. The shares were acquired by T Rowe Price International’s International Discovery Fund.
Henderson joins a slew of PE firms who have been making part exit from listed companies as the benchmark stock indices are headed close towards their all time peak touched in January 2008.
At that current price, HSIL has a market capitalisation of Rs 935 crore. Gross sales and profit after tax of the company in the financial year 2009-10 were Rs 835.73 crore and Rs 52.43 crore, respectively.
HSIL Ltd, a Kolkata-based company engaged in manufacturing sanitaryware products, had early this year acquired the faucet business unit of Havells India Ltd(which in turn is backed by Warburg Pincus and Saif Partners) in an all-cash transaction.
It acquired Havells’ manufacturing plant in Rajasthan that produces chrome-plated brass bathroom fittings and accessories. HSIL which gained scale with the acquisition of the faucet business, retails its sanitary ware products under Hindware brand, through exclusive and multi-brand outlets. The company runs its exclusive retail store under Evok.
It also manufactures and retails kitchen appliances and wellness products. The company plans to expand its exclusive outlets in other parts of the country to have a pan-India presence. The other major players in this category include Cera Sanitaryware Ltd and Parryware Roca Pvt Ltd.
According to a recent study by research firm KPMG, the sanitary and bathware segment has been growing at 12% -15% year-on-year. The market size is estimated at $500 million, while the organised sector contributes over half of the total sales by value.