Leading global equity company Warburg Pincus will invest $110 million (Rs437.7 crore) to pick up 11.2% stake in electrical and power distribution equipment firm Havells India Ltd.
Havells India will utilize the funds to partly retire debt raised by the company earlier this year to acquire Dutch company SLI Sylvanias lighting business to enhance its global presence.
Havells’ managing director Anil Gupta said: “Of the $110 million, $70 million would be used in retiring debt and the rest would be used in enhancing manufacturing capabilities of the company.”
He also indicated that the company will be looking for more acquisitions in the near future. The company will issue fresh shares and warrants to Warburg Pincus, representing approximately 11.2% of the fully diluted share capital of the company.
The company manufactures products ranging from building circuit protection, industrial and domestic switchgears, cables and wires, energy meters, fans, CFL lamps, luminaries for domestic, commercial and industrial application, and modular switches.
Julie Johnson Staples, head of Communications, Warburg Pincus, said, “Our investment in Havells India is reflective of our confidence in the management team of the company, its strong brand and distribution capability, as well as in the growth potential presented by the electrical products and power distribution segment.
We look forward to working together with Havells India’s management team to help the company achieve its long- term vision.”
Havells India chairman and managing director Qimat Rai Gupta said: “We welcome Warburg Pincus as a significant shareholder of the company. We believe that this investment by a leading private equity investor clearly reflects the confidence of the global financial community in our business model and growth aspirations.”
Gupta said the equity placement will provide Havells with additional debt raising capacity.
Over a 12-year period, funds sponsored by Warburg Pincus have invested approximately $2 billion in India making it one of the largest private-equity investors in the country.
The firms past and current investments in India include Ambuja Cements, Bharti Airtel, Dainik Bhaskar, Housing Development Finance Corporation, Kotak Mahindra Bank, Max India, Moser Baer and Nicholas Piramal among others.