Baring Asia invests $256m in Lafarge India

The capital raised will help fund the expansion of Lafarge India in all its product lines: cement, aggregates and concrete. Lafarge has four cement plants in the country, and is market leader in the ready-mix concrete business with over 80 plants, following its acquisition of L&T Concrete for $349 million in 2008.

Baring said in a statement that it expects strong growth in demand for housing and the government's focus on developing infrastructure to sustain high future growth rates for cement manufacturers in India.

Parent company Lafarge has been trying to reduce debt levels since it lost its investment-grade credit rating in 2012. It aims to bring net debt below EUR10 billion in 2013, down from EUR11.3 billion at the end of 2012.

Talks to sell equity in Lafarge India have been ongoing since last December, and KKR, Temasek Holdings, Advent International and Standard Chartered Private Equity were reported to have been potential investors.

The Times of India said in February that Lafarge was looking to shed a stake of 20-30% for INR13.25 billion but at too expensive a valuation - Lafarge India has the capacity to produce about 8 million tonnes annually, and was looking to get a valuation of $150 per tonne. Mid-cap stocks of similar capacities were trading below $100 per ton at the time, so a minority stake in Lafarge was not expected at such valuations.

Baring Asia manages more than $5 billion in committed capital. The firm specializes in mid-cap buyouts and providing growth capital to companies for expansion or acquisitions. 

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• Topics
• South Asia
• Expansion
• Industrials
• Baring Private Equity Asia
• India
• manufacturing