Cement makers in India take PE firms' aid for expansion
Cement

Cement makers in India take PE firms' aid for expansion

Indian cement industry, in the last couple of months, has found a helping hand in private equity (PE) firms for funding their business plans. The industry has witnessed a high demand for private equity funding companies, which are on an expansion spree. In one of the largest PE deals this year, Baring Private Equity Asia has invested about $260 million (Rs 1,440 crore) in Lafarge India for a 14 per cent stake in the cement firm.

The funding from Baring Asia will be used to double Lafarge India’s capacity at its Chhattisgarh plant. Another company that is in discussion for fund-raising is Heidelberg Cement India, a subsidiary of German multinational Heidelberg Cement.

According to reports, Bain Capital is conducting a due diligence to pick about 10 per cent in Heidelberg Cement India. Ravi Shankar, Managing Director, UBS India, said that typically, MNCs (multinational corporations) like to fund the growth capital of subsidiaries themselves, thus avoiding reporting to and involvement of external parties.

Indian cement industry, in the last couple of months, has found a helping hand in private equity (PE) firms for funding their business plans. The industry has witnessed a high demand for private equity funding companies, which are on an expansion spree. In one of the largest PE deals this year, Baring Private Equity Asia has invested about $260 million (Rs 1,440 crore) in Lafarge India for a 14 per cent stake in the cement firm. The funding from Baring Asia will be used to double Lafarge India’s capacity at its Chhattisgarh plant. Another company that is in discussion for fund-raising is Heidelberg Cement India, a subsidiary of German multinational Heidelberg Cement. According to reports, Bain Capital is conducting a due diligence to pick about 10 per cent in Heidelberg Cement India. Ravi Shankar, Managing Director, UBS India, said that typically, MNCs (multinational corporations) like to fund the growth capital of subsidiaries themselves, thus avoiding reporting to and involvement of external parties.

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