Warburg Pincus buys majority stake in India bath fittings brand
Warburg Pincus has acquired a majority stake in India’s Watertec, an affordable bath fittings brand with a nationwide footprint.
The private equity firm is taking a 66% position, according to AVCJ Research. The deal values the company at about USD 200m, Mint reported, adding that Warburg Pincus is positioned to take up the remaining 44% within 24 months.
Founded in 1996, Watertec positions itself as one of India’s leading polymer-based bath fittings brands with a distribution network spanning more than 20,000 retail touchpoints. Its product portfolio comprises some 1,900 stock-keeping units across taps, showers, mixers, health faucets, bathroom accessories, pipes, sanitaryware, and other allied products.
The company has three factories with a combined production capacity of 35m units a year, 35 warehouses, and around 1,600 employees. Annual sales in the 2021 financial year came to about INR 4.2bn (USD 51m) while profit reached INR 137.2m, according to ratings agency Crisil. Revenue is said to have grown by 11% in compounded terms over the three years through March 2022.
Anish Saraf, a managing director at Warburg Pincus India, praised the company as a category leader in lower-tier cities and rural areas.
“We believe bath fittings is an attractive market poised for strong growth driven by secular tailwinds from increasing sanitation levels, increasing housing penetration in Indian tier-two and three cities spurring greater demand for bath and sanitaryware and the penetration of polymer-based products offering better durability,” Saraf said in a statement.
“We are particularly impressed with Watertec’s growth track record and industry-leading return metrics and look forward to supporting the management team in its next phase of growth.”
The plan is to enhance brand equity, expand the product portfolio, and extend operations into new regions. This effort will be supported by the recent appointment of Mathew Job, formerly CEO of Crompton Greaves Consumer Electricals, as the company’s executive chairman.
Homebuilding, home furnishings and related services has proven an attractive investment category in India. Earlier this month, HomeLane, an interior design start-up that has raised more than USD 150m, received a INR 750m bridge round from unspecified existing investors.
Notable players also include The Carlyle Group-backed flooring and tiles specialist Varmora, as well as home decor portal LivSpace, which has raised more than USD 530m from the likes of KKR and Goldman Sachs.
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