Carlyle to acquire minority stake in Gujarat tile firm Varmora Granito

Indian company says it will use partnership for investments in brand building and, expanding distribution

Global investment firm Carlyle will invest an undisclosed amount in Varmora Granito Pvt. Ltd. to pick up a strategic minority stake in the Gujarat-based tile and bath ware company.

Equity for the transaction will come from funds managed and advised by entities affiliated with Carlyle Asia Partners Growth. Investment bank Steer Advisors is assisting Varmora in the transaction expected to close in the second quarter of FY23, subject to customary closing conditions.

Varmora, a founder-led company established in 1994, sells premium tiles, faucets, sanitary ware and other products through a national distribution network that includes more than 200 brand outlets in India and globally.

Varmora said it will use the partnership with Carlyle for investments in brand building, digital marketing, expanding distribution, and product innovation.

The company has invested around Rs 300 crore for a new tile manufacturing facility with a capacity of 35,000 sq. m. per day. With 11 plants and after expansion, the company's installed production capacity stand at nearly 150,000 sq. m. per day.

Carlyle has a positive outlook for India’s residential sector, which is gaining from rising per capita and premium products, and it expects significant growth for a branded building materials consumer player such as Varmora.

According to Amit Jain, managing director and co-head at Carlyle India Advisors, Varmora has a differentiated product portfolio, pan-India distribution network and an experienced management team.

"We are pleased to announce our partnership with Carlyle. Their business-building approach, trusted partnership mindset and deep global expertise in this space made them our preferred partner in this exclusive transaction," said Bhavesh Varmora, chairman of Varmora Granito.

Carlyle’s global private equity funds have experience in the consumer and retail sectors, with investments in Grand Foods China (McDonald’s China franchisee), Delhivery Ltd and Golden Goose, among others. Globally, Carlyle has invested approximately $25 billion of equity in over 135 deals in the consumer, media and retail sector, as of March 31, 2022.