Public markets focused private equity firm WestBridge Capital Partners has hiked its stake in Kolkata-based manufacturer of semi-vitreous tableware and kitchenware La Opala RG Ltd, two years after investing in the company.
WestBridge picked 2.5% additional stake in the firm for Rs 77 crore through a secondary market transaction on Friday.
This takes its total holding to over 7%. It had earlier picked 4.5% stake in the company for Rs 55.3 crore in 2014. That time the PE firm had invested through a preferential allotment of fresh shares of the company.
Promoted by Sushil Jhunjhunwala, La Opala, which went public in 1994, manufactures and markets opal glass tableware products such as plates, bowls, dinner sets, etc under brand names like Diva, La Opala and Solitaire Crystal.
It has two manufacturing facilities located at Madhupur, Jharkhand and Sitargunj, Uttarakhand with a combined capacity of 13,000 MTPA and has installed additional 8,000 MTPA capacity at its Sitargunj unit.
For the year ended 31 March 31, 2016, the firm clocked 10% rise in net sales to Rs 249 crore but recorded 40% jump in net profit to Rs 58.7 crore.
According to a research note dated 17 May by brokerage house Nirmal Bang, the management has indicated volume growth of 15-20% for FY17.
“The company enjoys more than a 50% market share in opalware and with customers replacing steel crockery and also lower market penetration, the company can sustain healthy growth going forward,” it said.
The note added that La Opala restructured its pricing strategy to promote volume growth and address price anomalies. It went for a 15% reduction in the prices of Diva range of products (constituting around 70% of revenues) and simultaneously scrapped additional promotional trade discount offered to dealers.
La Opala scrip shot up 8.33% to lose at Rs 581.5 share on BSE in a flat Mumbai market on Friday.
WestBridge Capital Partners
The PE firm that invests through both direct secondary market purchases and negotiated preferential allotment deals, invests out of an evergreen fund. Last year, WestBridge topped it up boosting its size by over two-thirdsto take the overall investment corpus to $1.4 billion.
For WestBridge, which has been actively betting on the consumer space, this is the second portfolio firm where it is looking to bet more this year.
It has made a voluntary open offer to raise its stake in another public listed consumer firm- snacks maker DFM Foods Ltd, to 51% . It is already an existing investor in the company.
It has also added Relaxo Footwears Ltd as its third new portfolio company this year for close to Rs 80 crore ($12 million) through a secondary market transaction.
Early this year, the fund, along with other co-investors, picked up stake in IndiaMART InterMESH Ltd, which runs an online B2B platform for small and medium businesses, in its Series C funding.
In another deal in the space, Gujarat-based Borosil Glass Works Ltd announced the acquisition of Hopewell Tableware Pvt Ltd (HTPL), a privately-held firm that manufactures tableware and dinnerware products made of opal glassware, for Rs 27 crore (about $4 million) in January 2016.
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