Mumbai Amit Jain, Managing Director and Co-Head, Carlyle India Advisors said in an interview, “India presents tremendous growth opportunities in consumer-centric businesses and Carlyle, a global private equity investor, is looking to capitalize on the emerging trend.
Carlyle recently bought a significant minority stake in tiles and bathware manufacturer Varmora Granito Pvt Ltd. Ltd. Established in 1994, Vermora’s portfolio includes premium tiles, faucets and sanitaryware, and its products are sold through a distribution network of over 200 exclusive brand outlets in India and globally.
Jain said, “If you look at (our investments) SBI Card, which are consumer and financial services, or Delhivery and Medanta which is consumer and healthcare, we have seen a series of investments in India and Asia on the theme of rising consumerism. of it.” ,
He said that consumers in India are passing through a secular shift from unbranded to branded products.
“When you look at emerging markets, and where India ranks on its per capita income, we believe that there are change points in the way consumers consume – whether it is food, apparel or the way they make their homes and invest in assets. What happens at these income levels is that there is a fundamental shift from impervious, unbranded products to high quality, differentiated, if not customized, products that are often associated with brands. Let us see a secular shift from unorganized to organized brand.”
With its investment in Varmora, Carlyle is betting on transforming the building materials sector from unorganized to organized, as consumers seek to spend more money on higher quality products.
“50% of the market is unorganized. More than 50% of the flooring in homes is still traditional materials or cement, not modern flooring solutions such as tile, wood flooring or marble. We love tiles as a great range for flooring solutions.”
“When we worked on Varmora, a few things came to the fore. Is a brand and differentiated product that has created a strong customer pull. They have over 200 EBOs (Exclusive Brand Outlets) where customers come exclusively to buy Vermora products. In Tier II-III cities, dealers are in line for EBO of Varmora which signifies the brand pull,” said Jain.
The investment by Carlyle will help the company drive digital transformation, accelerate distribution, enhance the brand and build capacity through greenfield expansion and through mergers and acquisitions.
“Our inclination is M&As where we can add capacity and not capacity. In a consumer business, capability is not as much of relevance, it is more about consumer attractiveness, product capability, brand and distribution network. If there are some places where there is product differentiation, if there is a brand that has a lot more recognition and complementarity and synergy than we have in certain regions or states, those are the acquisitions we will look at.”
Varmora plans to increase its top line 1,600 crore in this financial year, said Bhavesh Varmora, President, Varmora Granito.
It ended FY 2012 with a topline of 1,100 crores.
“We plan to expand our network of EBOs to 400 within a few years, doubling our production capacity,” he added.