About Us
Brands & Business
Knowledge Center
Media Corner
Contact Us

Baring, CVC pick up 15 percent stake in KS Oils

Click here for Download PDF

17 Jul, 2007, 0215 hrs IST, Bhanu Pande, TNN

NEW DELHI: Leading private equity players Baring and CVC are picking up 7.5% equity each in Madhya Pradesh-based KSOils. At a price of Rs 419 per share, each would be investing Rs 90 crore in the company. While KS Oils has roped in Baring Private Equity Asia to directly acquire 7.5% in the company, CVC would be investing by way of private placement of GDRs, or Global Depository Receipts.

CVC already holds 14.9% equity in the company. This is part of KS Oils' drive to raise Rs 400 crore for its expansion plans. The company board has also approved Rs 120 crore to be raised through foreign currency convertible bonds and Rs 100 crore from the promoters' by way of subscription of convertible warrants.

KS Oils MD, Sanjay Agarwal, confirmed the development. "We want to be a leading player in mustard oil segment and the interest evinced by leading PE players shows our company's credibility," he told ET. In addition, the company is raising Rs. 260 crore debt for wind mill projects in MP, Gujarat and adding warehousing facilities. The company's expansion plan includes five projects - three in MP and two in Rajasthan - over the next two years. Together, this will give it an additional capacity of 4,000 metric tonnes per day in oil mills, 3,000 MT in solvent extraction and 1,000 MT per day in refining.

The 3-lakh-tonne organised market for mustard oil is growing at 20% annually. At this pace, say industry watchers, the share of branded segment would reach 50-55% in five years, up from 15% today. "We hope to grab 20% share of the organised mustard oil market by 2011," Mr Agarwal said.

Though KSOL is the leader in mustard oil category and its brand Double Sher and Kalash are market leaders with close to 70% share in north-east India, it is keen to move from being a commodity player to a brand marketer.