FIIS, RELIANCE CAPITAL PICK UP 15% IN NITCO

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Leading foreign investors — Lehman Brothers, Citigroup, Merrill Lynch and Deutsche Bank — along with Reliance Capital, have picked up a 15% stake in publicly-listed Nitco Tiles, a leading tile manufacturing firm, for around Rs 170 crore.

The new equity holders will be routing their investments in the company through the qualified institutional investor route, sources said. The institutional investors are believed to have picked up the stake at Rs 270 per share.

When contacted, Nitco Tiles CMD Vivek Talwar declined to comment on the deal. The promoters of the company, the Talwar family, currently controls 47.9% stake in the company while banks, financial institutions and FIIs control around 24% stake. Post-issue, the promoters’ stake in the company will come down to around 45%. Promethean India, a part of the UK-based private equity group Promethean Plc, recently acquired 8% stake in Mumbai-based Nitco Tiles.

Nitco Tiles, a leading player in the ceramic floor tiles, is adding an additional capacity of 60% to take its total installed annual capacity of 6.3 million square metres. The company is doubling its production capacity at its ceramic tile plant in Alibaug, Maharashtra. The company has planned a capital expenditure of Rs 80 crore to double its capacity to 24,000 sq mt a day from the existing 13,500 sq mt. The current market share of Nitco Tiles, among organised players, stands at 10%. The company is also outsourciung vitrified tiles from China. The company has also entered the importing and distribution of cement business.

Nitco Tiles had merged its real estate subsidiaries — Shark Properties, Nitco Realties and Motivation Properties — with itself. An industry analyst said the current buoyancy in demand for ceramic tiles and the geographically-diversified marketing network of the company are likely to ensure better volume growth.

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