Public markets focused private equity firm WestBridge Capital Partners has increased its holding in tyre maker CEAT Ltd, the flagship company of Harsh Goenka-led RPG Enterprises, through an off-market transaction last week. The PE firm had previously picked a small stake in tranches over the past couple of months.
WestBridge has acquired 3.51 per cent additional stake in the Mumbai-based tyre maker for around Rs 125-130 crore ($20 million) post which it holds 5.64 per cent stake in the company, according to a stock market disclosure. The stake was apparently acquired from an investment arm of Kotak Mahindra Bank.
WestBridge, through its arm Jwalamukhi Investment Holdings (JIH), already held 2.13 per cent stake in CEAT. Of this, it acquired around 1 per cent in the previous quarter and added more shares last month for around $10 million, as per VCCircle estimates.
VCCircle had first reported that the PE firm has picked a stake in the company.
CEAT manufactures tyres for trucks and buses, light commercial vehicles, earthmovers and forklifts, tractors, trailers, passenger cars, motorcycles, scooters and auto-rickshaws.
It has partnership with the companies like Tata Motors, Bharat Benz, Asia Motor Works, Eicher, Ashok Leyland, Bajaj, Royal Enfield, Mahindra & Mahindra, Voltas, Godrej, etc as an OEM supplier. It also sells products in the after-sales market to consumers through dealers.
For the quarter ended June 30, 2015, CEAT’s net sales was almost flat at Rs 1,456 crore while its net profit more than doubled to Rs 121 crore over the year-ago period.
For WestBridge, this is the second addition to its portfolio after it backed housing finance company India Shelter Finance Corporation early this year. It has, however, put more money in some existing portfolio firms like Greenply and Greenlam.