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Motilal Oswal group-backed funds India Business Excellence Fund – IV, managed and advised by MO Alternate Investment Advisors Private Limited (MOPE), along with India SME Investments - Fund I and Motilal Oswal Finvest Ltd have completed an investment of $66 million (around Rs 520 crore) in tiles manufacturer, Simpolo Group.
“We believe that the luxury and premium tiles segment in India is poised for rapid growth, as the share of high-end tiles will increase from less than 10% today to 30-40% as seen in developed markets. Simpolo and Nexion, with their focus on innovative designs, superior product quality, widespread dealer network and brand positioning is well placed to capture this growth and become a leading building materials player in India,” said Prakash Bagla, Director of MOPE. Last month, the ceramics tiles maker had received regulatory approval to raise the funding from the entities.
In 2020 Simpolo Vitrified had hired the investment banking arm of Motilal Oswal Financial Services Ltd to scout for portential investors. India SME Investments fund I, operating since 2019, and a sector agnostic fund focussing on investing in early-growth small and mid-size companies. Simpolo is India SME’s 9th investment and has earlier concluded deals in the fintech, retail, branded food processing, manufacturing and B2B platform businesses.
Meanwhile, MOPE is managing both private equity and real estate funds and cumulatively manages around $1.7 billion between the two asset classes. The private equity vertical focuses on providing growth capital to mid-market companies across its preferred sectors of consumer, financial services, life sciences and niche manufacturing, typically in the range of Rs 200-500 crore.
It is currently raising its fourth fund IBEF IV with a target corpus of Rs 4,500 crore. Earlier in April, International Finance Corporation (IFC), the private investment arm of World Bank, committed to invest at least $35 million in the fund. IBEF IV’s focus will continue on providing growth capital to mid-market Indian companies.
“The Simpolo Group will use the financial resources, access to best practices and the skills contributed by MOPE to capture market share and grow penetration in India and abroad, enabled by targeted investment in sales, advertising & promotions, and to expand the current capacity in tiles and sanitaryware, improve logistic and enhance customer service. Simpolo sanitaryware division will also expand into the faucets sector, the statement added.
On a consolidated basis, Simpolo and Nexion reported revenues of around $150 million in FY 2022. Motilal Oswal Investment Advisors has acted as an exclusive financial adviser to the Simpolo Group. Wadia Ghandy & Co, AZB Partners and JSA Advocates & Solicitors were the legal advisers to the transaction.
