HSIL Ltd, a Kolkata-based company engaged in manufacturing sanitaryware products, is acquiring the faucet business unit of Havells India Ltd. 

Though the company did not disclose the financial details, it said, it will be an all-cash transaction for the deal.

HSIL is acquiring Havells’ manufacturing plant in Rajasthan. The unit manufactures chrome-plated brass bathroom fittings and accessories. Havells, the New Delhi-based company, is a market leader in electrical switch gears and lighting equipment in industrial and home use category.

Private equity firm Warburg Pincus holds around 15% stake in Havells. The company has also raised funding from SAIF Partners and Henderson Equity Partners.

HSIL states that the acquisition will help it grow in this segment to become the second largest player in faucet business in  one year. It 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. The study also figured the energy efficient lighting solutions market, which was growing at 30% in 2008, much faster than the bath ware segment.

The stocks of HSIL were traded at Rs 79.15, up by Rs 1.35, or 1.74% in the BSE. At that current price, HSIL has a market capitalisation of Rs 435.05 crore. Net sales and net profit of the company in the financial year 2009-10 were Rs 615.78 crore and Rs 32.67 crore, respectively.

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