Motilal Oswal Private Equity Advisors Pvt Ltd (MOPE), the PE arm of Motilal Oswal Financial Services Ltd, is investing Rs 90 crore (about $13.5 million) in the country's top mattress maker Kurlon Ltd, that sells products under the brand Kurl-on.
MOPE will invest Rs 70 crore into the firm through subscription to fresh securities and buy shares worth Rs 20 crore from the Kurl-on promoters, as per a disclosure by a group firm that owns a stake in the mattress maker.
Separate emailed queries to Motilal Oswal PE and Kurl-on on the development did not elicit any response immediately.
Kurlon—earlier known as Karnataka Consumer Products Ltd—was set up in 1962 by Ramesh Pai and is a part of the Rs 2,000 crore Manipal Group of Companies, which has interests ranging from education, healthcare and financial services.
The Bangalore-based firm is involved in making mattresses, furniture and home furnishings. It currently has 10,000 dealers and 72 offices across 2800 towns in India.
Kurlon is three times the size of its nearest competitor Sheela Foam Pvt Ltd. Sheela Foam, which is a larger company given its other product lines, sells foam, coir and spring mattresses under the Sleepwell brand and industrial application mattresses under the Feather Foam brand. Other major players include Duroflex India and Coirfoam (India) besides international labels.
The firm was in talks with various large PE firms to raise funding for almost four years now. Some reports had said the company is looking to raise Rs 400 crore in a deal valuing it at around Rs 900 crore.
It was also eyeing an IPO a few years ago that didn't materialise. The company has been facing margin crunch for the last few years even as its revenues kept climbing, as per VCCEdge, the data research platform of VCCircle.
For MOPE, which manages its sector-agnostic mid-market PE funds besides a real estate investment unit, this is the second deal from the PE unit this year after it invested close to $5 million in Ahmedabad-based drug maker Arinna Lifesciences Pvt Ltd.
MOPE manages two sector-agnostic PE funds India Business Excellence Fund-I and India Business Excellence Fund-II. Kurlon investment is through India Business Excellence Fund-II. A senior executive of the PE investment unit Rakesh Sony has just quit the firm.
The firm's realty investment unit has been more active in deploying capital.
Recently, MOPE part-exited Hyderabad-based power infrastructure service provider Power Mech Projects Ltd in the company's initial public offer that was oversubscribed 37 times.