Kamdhenu is looking at divesting around 20% of its stake in the paint business that it plans to demerge from the company in the next six months.
Growing at a rate higher than the industry average, the paints division of the country’s largest manufacturer and seller of TMT bars is expected to clock around Rs 1,000 crore revenue in the next 4-5 years, said company’s chairman and managing director Satish Agarwal.
“Paint, as a business, is growing like FMCG products now. While the industry is witnessing around 18-20% annual growth, our paint division is expected to grow at a much faster rate at 40-45% in the coming years. The proceeds from the stake divestment in the paints business will be used for capacity expansion,” Agarwal said.
He said rise in disposable income of the average middle class, urbanisation, growing rural market, shortening of repainting cycle, upgradation, increase in sale of premium-end products and launch of many innovative products are fuelling the growth of organised players like Kamdhenu.
The company will soon start the process of demerging the paint business.
Kamdhenu will initiate talks with the private equity players soon after getting various statutory approvals, including the one from the National Company Law Tribunal (NCLT), for the paints business demerger plan.
In the third quarter of the current fiscal, the paint business contributed 36.9% of the company’s overall revenue of Rs 192 crore, up from 29.5% in the same quarter last fiscal.
Kamdhenu has its own state-of-the-art manufacturing plant at Chopanki in Rajasthan with an installed capacity of 30,000 kilo litter (KL). It also outsources median and low-range products like distemper, emulsions and putty, etc. from manufacturing units in Rajasthan, Uttar Pradesh and Punjab. The company has 4,000 dealers and distributors and 32 sales depots across the country.