Nalanda Capital buys into WestBridge Capital-backed Cera Sanitaryware

Singapore-based Nalanda Capital has built up a 2.2 per cent stake in Cera Sanitaryware Ltd (CSL), one of the largest sanitaryware companies in India, over the last two quarters.

According to VCCircle estimates, Nalanda Capital has spent Rs 14-15 crore to acquire the stake.

Cera counts WestBridge Capital Partners as its biggest institutional shareholder with an 8.87 per cent stake. WestBridge had built its stake in Cera from mid-2012 to mid-2013.

Cera's scrip was trading at Rs 696.60, down by 2.12 per cent on Friday at 3:07 pm giving the company a market capitalisation of Rs 884.68 crore.

For first two quarters of FY14, Cera reported over a 41 per cent increase in sales to Rs 285 crore with net profit rising 7.5 per cent to Rs 21.8 crore compared with the same period last year.

"We view Cera’s entry into the faucet ware business as a positive as it provides a significant scalable opportunity; however, the business is challenging and is currently loss-making. This is primarily due to low brand awareness in faucet ware and significant competition from unorganised players and Jaguar. We expect the business to grow at 29 per cent CAGR and become profitable during FY13-15 on its plans to introduce new faucet designs with higher profitability and better branding," said a CRISIL report on the company dated August 2013.

(Edited by Joby Puthuparampil Johnson)

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