This comes as a back-to-back, block-buster deal from KKR quarters. Just a month after it announced a $75-million investment in Coffee Day Resorts, Kohlberg Kravis Roberts & Co or KKR has inked a Rs 750-crore investment deal with Dalmia Cement (Bharat) Ltd.
As part of the deal, KKR will invest up to Rs 750 crore ($165.59 million) in Dalmia Cement's unlisted subsidiary Avnija. JM Financial advised KKR on the transaction, while Equirus Capital acted as financial advisor to DCBL. This is the largest private equity deal in the cement industry, according to a company statement. No other details related to the transaction were disclosed.
The subsidiary Avnija will house DCBL’s 9 MTPA (million tonne per annum) cement manufacturing capacity, DCBL's stake in OCL India Ltd (5.3MTPA capacity) along with the upcoming green field projects of 10MTPA across the country. The use of proceeds will be for both organic/inorganic growth and de-leveraging, said a statement. “When we realigned our businesses in March 2010, one of our goals was to create separate pure play entities that could thrive on their own and have flexibility to raise capital,” said Puneet Dalmia, MD of Dalmia Cement (Bharat) Limited.
"We are excited to be working with a dynamic and entrepreneurial family with a successful execution track record in India. While the cement industry by nature is cyclical, this is a long-term investment in a great family business, its management team and in India’s economy. This is a way to invest behind and contribute to the continued development of India’s residential, commercial, and public sector infrastructure,” said Sanjay Nayar, a Member of KKR and CEO of KKR India, in a statement. The transaction is subject to customary regulatory approvals.
Since 2006, KKR has invested over $1.1 billion in India in technology firm Aricent; telecom infrastructure player Bharti Infratel and Coffee Day Resorts, operator of the Café Coffee Day chain of cafes in India.