Gujarat-based sanitary products making company Cera Sanitaryware Ltd has entered into a joint venture agreement with Anjani Tiles Ltd for setting up a tiles manufacturing plant requiring an investment of $10.5 million in Andhra Pradesh, according to a stock market disclosure.
The project, which will start in April 2016, will have an initial capacity of 10,000 square meters per day of tile production.
It will require an investment of Rs 68 crore ($10.5 million), to be paid through an equity component of Rs 36 crore while the balance will be through long-term debt, the company said.
Cera will invest Rs 18.36 crore ($2.8 million) for its 51 per cent stake in the venture and Anjani will inject Rs 17.64 crore ($2.7 million) for its 49 per cent stake.
“South is a major market for us. And with the new capital city of Andhra Pradesh, Amaravathi, being announced we see greater scope with increased construction activity there. Also, Andhra Pradesh has announced subsidies to encourage businesses to grow,” said Vikram Somani, chairman, CERA Sanitaryware Ltd.
Anjani Tiles was incorporated in April 2015 and is based in Andhra Pradesh.
Cera Sanitaryware, one of the largest sanitaryware companies in the country, was founded in 1980. The firm manufactures products like wash basins, baths, water closet pans, urinals, shower panels etc.
Early this year, it raised a funding round of Rs 70.6 crore ($10.9 million) from Lighthouse Funds‘ second private equity fund through preferential allotment. It also counts Westbridge Capital and Nalanda Capital as its shareholders.
For the second quarter ended September 2015, Cera Sanitaryware posted 13 per cent increase in its sales to Rs 225 crore and its net profit rose to Rs 18 crore, hikes 14 per cent from last year’s Rs 16 crore for the same period last year.
(As published in deal street asia 24th October 2015)