Hind Sanitary looking for M&A deals

Hindustan Sanitaryware & Industries Limited (HSIL), one of the leading Indian manufacturer of sanitaryware products, is looking for acquisitions in the building products sector in India and east Asia.

The company has already initiated discussion with two building product companies in India and one in east Asia for acquisition.

The acquisition would be a part of the company's strategy to become a total home solution provider from a mere sanitaryware manufacturer.

HSIL has already entered into bathroom solutions and kitchen solutions through technical tie-ups and internal R&D efforts. The company's products were sold at present under the Hindware and Rassi brandnames.

It was also marketing top-end bathroom solutions under the Grohe and Keramaag brands.

The joint managing director of Hindustan Sanitaryware, Sandip Somany, said talks were in an advanced stage with the Indian companies.

The deal with the east Asian company would take more time.

"The foreign company has more or less agreed with our terms and we are hopeful," he said.

HSIL was likely to use upto Rs 150 crore for acquisitions.

HSL raised around Rs 55 crore through private placement of fully convertible debentures to private equity funds.

"The rest will come from internal accruals," Somany said.

The Hindustan Sanitaryware board has approved issue of fully convertible debentures to HPC (Mauritius) Limited,a subsidiary of Henderson Asia Pacific Equity Partners.

HSIL will issue 33,00,000 FCDs to Henderson at Rs.160.25 per FCD. The FCDs will be convertible within 18 months into equity shares on 1:1 basis.

"The company has been increasingly focusing on newer product ranges and has already introduced 50 products in the last 18 months besides developing eco-friendly products," he said.