Private equity firm WestBridge Capital is picking 4.5 per cent stake in Kolkata-based manufacturer of semi-vitreous tableware and kitchenware La Opala RG Ltd for Rs 55.3 crore ($9 million) through a preferential allotment.
The company’s board has approved the issue of 0.5 million equity shares at a price of Rs 1,100 each to WestBridge Crossover Fund, LLC.
The firm plans to use the money for capital expansion of both its existing manufacturing plants besides other purposes.
La Opala is nearly three decades old firm founded by Sushil Jhunjhunwala. It went public in 1994. For the year ended March 31, 2014, the firm clocked 15.5 per cent rise in net revenues to Rs 177.86 crore with net profit rising 30.9 per cent to Rs 29.95 crore. The firm has three brands—La Opala, Diva and Solitaire.
For WestBridge Capital, this marks the addition of seventh new portfolio firm since January this year and the third in the consumer space. It recently picked stake in India’s largest private sector dairy firm Hatsun Agro Product Ltd.
It has also invested in firms like Cholamandalam Investment and Finance Company Ltd, Mayur Uniquoters Ltd, AIA Engineering and Vistaar Financial Services. In the consumer space it had picked a stake in snacks maker DFM Foods early this year.
Although there have been private equity deals in the kitchen appliances segment in the past, this is one of the first transactions involving a niche area like tableware.
In another deal in the sector Jaipur-based Clay Craft India, a manufacturer and retailer of fine bone china and ceramic tableware, acquired the brand of Jaipur Ceramics Pvt Ltd (JCPL) for an undisclosed amount.
With the acquisition, Clay Craft plans to pump in Rs 100 crore to set up a new plant to align the supplies for JCPL brand, and expects to double its turnover.
Clay Craft, established in 1994, has a turnover of over Rs 150 crore in household and hospitality segments. The firm's production plant situated at Jaipur has a capacity of 1.10 lakh pieces per day.
(Edited by Joby Puthuparampil Johnson)