Nirma Group Eyes Rs 7,000 Crore Fundraising for Acquisitions and Expansion

28 Jul 2023 , 01:45 PM

The Nirma Group, a prominent detergent chemical major, is seeking to raise to Rs 7,000 crore for acquiring and expanding its existing facilities, as per investment banking sources.

The unlisted company recorded impressive revenues of Rs 11,403 crore in fiscal year 2023. It has expressed interest in making a financial bid for Glenmark Life Sciences, which is currently up for sale by its promoter.

Nirma is planning to diversify its portfolio through acquisitions ranging from Rs 5,000 crore to Rs 7,000 crore, targeting both domestic and overseas markets.

In case the acquisition plans do not materialize, the company may channel its efforts into aggressively boosting its current businesses and investing in capital expenditure of a similar size.

While initiating talks for the fund-raising exercise, Nirma has not disclosed the specific acquisition target.

Indian banks being restricted from funding acquisitions, the company might turn to the private credit market, which global private equity players currently dominate.

Nirma, which posted a profit of Rs 909 crore in fiscal year 2023, is expected to generate annual cash accruals of over Rs 1,700 crore, with a debt repayment of Rs 650-750 crore anticipated in fiscal year 2024.

In July 2016, Nirma made its first major acquisition by acquiring Lafarge India cement assets, which had a capacity of 11 million tonnes, for Rs 9,400 crore. The funding for this acquisition came from a combination of debt from foreign banks and equity.

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