Mid-market private equity firm Lighthouse Advisors Pvt. Ltd has invested Rs 250 crore ($35 million) in Delhi-based footwear manufacturer Aqualite Industries Pvt. Ltd for a minority stake, marking its fourth transaction this year.
Aqualite plans to use the money for marketing and capacity expansion, and to fuel other growth plans, said a press statement.
“We are very excited to partner with Lighthouse, given their impressive track record of investments in over 25 brands,” said Davinder Gupta, founder of Aqualite, set up more than three decades ago.
EY acted as financial adviser to Aqualite for the transaction.
“We strongly believe in the growth story of footwear industry in India, with the current under-penetration (per person spending of only 1.8 pairs yearly versus 3.1 in China) and consumer preference shift towards branded wear,” said Sachin Bhartiya, partner at Lighthouse.
Aqualite has its manufacturing units in Haryana and Rajasthan. It has a pan-India distribution network of 35,000 retailers, with a significant presence in north and east India.
The company had posted net sales of Rs 540 crore for the financial year 2016-17, up from Rs 525 crore a year before, according to VCCEdge (www.VCCEdge.com), the financial data platform of News Corp VCCircle. It is expecting a turnover of over Rs 800 crore in the current financial year of 2018-19.
The private equity firm focuses on consumer-centric sectors such as healthcare, food and beverages, personal care, building materials, consumer durables, logistics and financial services.
In September, VCCircle reported that the firm added beauty e-tailer Nykaa to its portfolio of consumer-focused companies, paving the way for existing investor TVS Capital Funds’ exit.
In June, VCCircle reported the firm invested in Tynor Orthotics Pvt. Ltd, which makes support devices for body parts.
In March, VCCircle reported that the firm had marked the first close of its third India fund at $150 million (Rs 974 crore), and was aiming to achieve the final close at $200 million by June.
The firm’s other portfolio companies include laminates maker Stylam Industries, quick service restaurant chain Wow! Momo and listed retail chain V2 Retail Ltd (formerly Vishal Retail Ltd).
Lighthouse has also struck a few exits.
In May, Lighthouse walked away with a bountiful harvest from its four-year investment in snacks maker Bikaji Foods International Ltd.
Before that, Lighthouse’s previous exit was in February 2017 when it had sold its stake in Unibic Foods to Peepul Capital.
Deals in the space
Aqualite competes with homegrown footwear companies and listed peers such as Khadim India Ltd, Relaxo Footwears Ltd, Bata India Ltd, Sreeleathers Ltd and Liberty Shoes.
Several Indian footwear makers have attracted big cheques from institutional investors in the past, and some of them have even listed themselves on the bourses.
Khadim India Ltd, the country’s second-largest branded footwear retailer by exclusive stores, made a weak debut on the stock market last November.
Multi-brand footwear chain Metro Shoes Ltd, which counts ace stock-market investor Rakesh Jhunjhunwala among its backers, recently identified merchant bankers for its public debut.
In August 2017, budget sports shoe brand Campus raised its first institutional round of funding led by TPG Growth, the growth equity and mid-market buyout fund of private equity firm TPG Capital Inc.