CLSA Private Equity-backed power equipment and oil-based products maker Apar Industries has raised Rs 80 crore or $18 million by selling 10.11 per cent stake to Templeton Strategic Emerging Markets Fund III, L.D.C.
The company had earlier said that the proceeds of the preferential issue were intended to be utilised for part-financing and capital expenditure towards the business, strengthening the core working capital requirements of the firm and repayment of loans.
Apar Industries, which has also attracted investments from ChrysCap chief Ashish Dhawan in his personal capacity, makes transformer and speciality oil, besides power conductors. Three years ago, it acquired a loss-making public listed firm Uniflex Cable which is into power and telecom cable business.
Apar is also amalgamating Uniflex and its wholly owned subsidiary Marine Cables & Wires Pvt Ltd that will consolidate its business under one roof. Uniflex is a financially sick company and clocked consolidated net sales of Rs 180 crore with net loss of Rs 26.8 crore for the year ended March, 2010.
The cable business is growing at a fast clip in India, backed with rising activity in the power sector. With the acquisition of Uniflex and now its amalgamation, Apar Industries ensures product diversification within its business domain of power transmission and distribution products.
The latest fund-raising comes five-and-a-half years after the last equity infusion in the company. In late 2005, Shinny Ltd, a subsidiary of ARIA Investment Partners II, LP, had invested Rs 63.75 crore through cumulative compulsorily convertible preference shares.
ARIA Investment Partners is a pan-Asian private equity fund providing growth and expansion capital to mid-market Asian companies. It is managed by CLSA Capital Partners, the alternative asset management arm of independent brokerage and investment group CLSA Asia-Pacific Markets.
Last December, Apar’s management had said that the company was looking to raise up to Rs 100 crore and was considering a qualified institutional placement, but eventually went ahead with a straight preferential allotment to an institutional investor.