Future Cap arm buys Interarch for Rs 100 cr

PRIVATE EQUITY WATCH

Indivision, a private equity arm of Future Capital Holdings, has picked up 13.3 per cent stake in New Delhi-based Interarch Building Products for Rs 100 crore.

The transaction values of the country's largest metal building maker at Rs 751 crore, 1.66 times of its expected turnover of Rs 450 crore at year-end.

Future Capital Holdings is the financial arm of the Kisore Biyani-owned Pantaloon Group. Indivision owns stake in companies such as Sula, VLCC, Billimoria, Global Hospitals and Lilliput.

Indivision will have a representative on the Interarch board. The deal will provide Interarch the fillip to raise its business to the next level with Future Capital's experience in the malls and housing space.

"This first-of-its-kind deal in the rapidly growing pre-engineered building market will enable us to scale our business to meet the massive demand and continue to maintain our dominance in the space," said Arvind Nanda, founder and CEO, Interarch.

The money would be utilised to set up a plant to scale up the company's production capacity to 1,000 crore buildings a year from 600 crore, he said. Interarch has production facilities at Greater Noida and Patnagar. The new facility will come up at Greater Noida by 2010.

Interarch, promoted by Arvind Nanda and Gautam Suri over two decades ago, has built Tata Motors' Singur and Patnagar factories, e-choupals for ITC and petrol pumps for Reliance Industries. Its other clients include Bajaj, BPCL and Hariyali Kisan Bazar.

The pre-engineered building market in India is expected to witness explosive growth in the next few years driven by growth in manufacturing, logistics, infrastructure and SEZ development, industry people said.

Future Capital operates in the asset management and consumer credit businesses. The asset management business has four funds under management - Kshitij ($850 million domestic real estate fund), Horizon ($350 million international realty fund), IndiVision ($400 million non-leveraged private equity fund) and a new hospitality fund ($350 million).

The consumer credit business includes retail lending. Recently, George Soros picked up a minority stake in Future Capital.