Ceramic tiles major Somany Ceramics Ltd has acquired 26 per cent strategic equity stake for a consideration of Rs 5 crore, in Vintage Tiles Pvt Ltd (VTPL), a Gujarat-based tiles manufacturing company.
On Friday, the share price of Somany Ceramics on the BSE closed 1.79 per cent up at Rs 48.45.
Somany Ceramics will have complete access to VTPL's manufacturing capacity of 2.75 million square metres a year of polished vitrified tiles. After the acquisition, the combined annual production capacity of Somany Ceramics will increase to about 22 million sq m annually, according to a company statement here on Friday.
Mr Abhishek Somany, Joint Managing Director, said Somany Ceramics is looking at an additional annualized revenue of about Rs 70–80 crore from the acquired plant. The equity stake is likely to be increased to 50 per cent in the future.
Production at the Morbi-based plant of Vintage Tiles in Gujarat will commence next month. Somany Ceramics will be marketing the entire lot of polished vitrified tiles manufactured by the plant.
Vintage Tiles is at an advanced stage of setting up the plant with a capacity to manufacture 7,500 square metres of polished vitrified tiles a day at Morbi.
Somany's current combined manufacturing capacity at the two existing plants at Kadi (Gujarat) and Kassar (Haryana) is 19.15 million sq m a year . The company plans to double the production capacity of the Morbi plant to about 14,000 sq m of polished vitrified tiles a day.