Kamdhenu Ispat today said it is in discussion with private equity firms to raise Rs 50 crore for expanding the capacity of its paints manufacturing plant in Rajasthan and to produce raw material for its paints division.
“We are in talks with foreign private equity firms to raise Rs 50 crore for expanding the paints division. The deal is likely to happen in three-four months from now,” Kamdhenu Ispat Chairman and Managing Director Satish Kumar Agarwal told PTI.
Kamdhenu Ispat, which is mainly into manufacturing and marketing of TMT bars and structural steels for use in the construction sector, had forayed into the paints business in 2008 by setting up a plant near its steel mill at Bhiwadi in Rajasthan.
The company has a 60,000 tonne-a-year paints manufacturing capacity and post-expansion in the next 12-24 months, it is slated to go up to 90,000 tonnes per annum, Agarwal said.
The paints division of the company, where the company hopes to clock 30-40 per cent growth in revenue in the coming years, has grown manifold in the last four years to record a revenue of Rs 158 crore in 2011-12 from Rs 36 crore in FY’09.
Under the brand ‘Colour Dreamz’, Kamdhenu offers a complete range of decorative paint products. It has a network of 5,000 dealers and distributors operating across the country. It has 31 sales depots to facilitate timely delivery to customers.
The company is also in talks with a Raipur-based paints producer for contract manufacturing to cater to the country’s southern market, where it has no significant presence.
The Indian paints industry is pegged at Rs 21,000 crore in India. The organised sector accounts for around 70 per cent of the total annual demand. The share of the decorative segment is almost 75 per cent of the total demand.
Kamdhenu Ispat had recorded a revenue of Rs 481.51 crore in 2011-12, a majority of which came from the steel business. Agarwal believes the paints division might have contributed to about one-third of the total revenue in 2012-13 fiscal. It is yet to come out with its annual results.