Private equity (PE) firm Warburg Pincus has acquired around 75-80% stake in Mumbai-based furniture company Ebco at a valuation of Rs 3,500 crore. On Friday, Ebco, which is one of India’s oldest furniture hardware brands, set up in 1963, said that the promoter family led by Geoffrey Nagpal, would retain a minority stake in the firm following the transaction. The promoters would also continue to play an active role in operations of the company and its future growth plans.

“Ebco is at an exciting phase of growth. This partnership with Warbus Pincus will enable the company to capitalize on the strong industry growth prospects and deepen its presence in every part of the country,” Nagpal, who is MD of the company, said.

Avendus Capital was the financial advisor to Ebco, which had been looking to offload a stake for some time and had been talking to a number of private equity investors including names such as KKR, TPG and Kedaara Capital besides Warbug Pincus, industry sources said.

PE interest in furniture companies such as Ebco comes on the back of around 13-14% compounded annual growth rate that India’s overall furniture market, which is valued at Rs 1.4 trillion, is expected to see over the next few years.

While the organised segment of the total furniture market is small at around 10-15% of the overall market, the entry of big retailers such as Ikea and the emergence of online players such as Pepperfry have changed the dynamics of the market in recent years, experts said.

Growing disposable incomes, lifestyle changes and the lack of time among consumers in big cities have opened up the market for organised furniture and fittings firms, experts said.

“We believe that the Indian furniture fittings and architectural hardware industry is poised for significant growth over the next several years, underpinned by tailwinds from favourable demographics fueling real estate demand, rising furniture modularization, and increasing home renovations,” said Anish Saraf, MD of Warburg Pincus India.

Ebco offers over 4,500 SKUs across various product categories, including bed and wardrobe fittings, kitchen systems, office furniture fittings, window and door hardware, and furniture lights. It has three manufacturing plants in Maharashtra, with plans for more factories across states. Ebco also has a network of 5,500 retail touch points including stores across the country.