Key Takeaways
- • Warburg Pincus has emerged as the frontrunner to acquire a minority stake in a demerged unit of Pricol, the Coimbatore-based listed auto parts maker, according to people familiar with the matter cited by The Economic Times.
- • The unit, which makes digital dashboards and instrument clusters for two-wheelers, could be valued at ₹5,000 crore and accounts for roughly half of Pricol's annual revenue of about ₹4,000 crore.
- • Warburg Pincus is in talks for a 10-20% stake requiring a fund infusion of ₹500-1,000 crore, with final terms still subject to negotiation.
- • At least two other global private equity funds had also shown interest, but Warburg Pincus edged ahead in the race.
- • Promoter Vikram Mohan and family are not selling any stake; proceeds would fund capex and inorganic growth. The demerger still awaits formal approval from the National Company Law Tribunal.
Summary
Warburg Pincus has become the leading contender to take a minority stake in a demerged business of Pricol, a listed auto parts manufacturer based in Coimbatore, according to people familiar with the matter reported by The Economic Times. The unit, named Driver Information and Connected Vehicle Solutions, produces digital dashboards and instrument clusters for two-wheelers. It could be valued at around ₹5,000 crore, and accounts for about half of Pricol's annual revenue of roughly ₹4,000 crore.
The U.S. private equity firm is in talks to acquire a 10-20% stake, which would require a fund infusion of between ₹500 crore and ₹1,000 crore depending on the final terms. The business drew interest from at least two other global private equity funds, but Warburg Pincus moved ahead in the process, the sources said. Neither Warburg Pincus nor Pricol responded to ET's queries before press time on Wednesday.
Promoter Vikram Mohan and his family are not selling any shares in the unit. The capital would be deployed toward the company's capital expenditure plans and inorganic growth opportunities, the sources said. The demerger has not yet received formal approval from the National Company Law Tribunal.
Pricol's remaining businesses, covering actuation, control and fluid management, will stay within the existing company. The demerged unit's customers include TVS Motor, Ather Energy, Honda Motorcycle and Royal Enfield. Separately, Pricol recently acquired the injection moulding business of Sundaram Auto Components for ₹215 crore, expanding into injection-moulded components such as fenders and body panels for two-wheelers. The company also manufactures fuel pumps for two-wheelers and water pumps for customers including Caterpillar.
The U.S. private equity firm is in talks to acquire a 10-20% stake, which would require a fund infusion of between ₹500 crore and ₹1,000 crore depending on the final terms. The business drew interest from at least two other global private equity funds, but Warburg Pincus moved ahead in the process, the sources said. Neither Warburg Pincus nor Pricol responded to ET's queries before press time on Wednesday.
Promoter Vikram Mohan and his family are not selling any shares in the unit. The capital would be deployed toward the company's capital expenditure plans and inorganic growth opportunities, the sources said. The demerger has not yet received formal approval from the National Company Law Tribunal.
Pricol's remaining businesses, covering actuation, control and fluid management, will stay within the existing company. The demerged unit's customers include TVS Motor, Ather Energy, Honda Motorcycle and Royal Enfield. Separately, Pricol recently acquired the injection moulding business of Sundaram Auto Components for ₹215 crore, expanding into injection-moulded components such as fenders and body panels for two-wheelers. The company also manufactures fuel pumps for two-wheelers and water pumps for customers including Caterpillar.
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