Apollo Pipes acquires majority stake in Kisan Mouldings to bolster position in Indian pipes and fittings industry
Apollo Pipes Limited has announced a strategic move that underscores its growing influence in the pipes and fittings industry in India. By acquiring a majority controlling stake in Kisan Mouldings Limited (“KML”), Apollo not only secures its leadership in the sector but also demonstrates its commitment to expanding its product range and market reach. The acquisition involves a preferential issue allotment of 640,00,000 equity shares, priced at Rs. 18.50 per share, leading to a total investment of Rs. 118.40 Crores.
This pivotal transaction aligns perfectly with Apollo’s strategic vision of becoming the premier manufacturer in the Plastic Pipe Industry within India. The integration of KML into Apollo’s portfolio is expected to unlock synergistic benefits, enhancing market penetration and enabling entry into new end-user segments. Apollo aims to leverage KML’s strong brand equity and extensive dealer network to accelerate its geographical expansion, particularly in the Western and Central regions of India.
The main advantages of this acquisition include:
– Leveraging KML’s experience and network to unlock greater value in PVC pipes, fittings, UV resistant multi-layer water tanks, and allied products.
– Expansion of distribution channels across major Indian markets, facilitating broader market penetration.
– KML’s high brand equity among key stakeholders, including farmers, architects, builders, interior designers, and homeowners, presents significant opportunities for growth.
KML’s portfolio includes a wide range of high-quality products catering to diverse preferences and purposes, supported by over 100 dealers and 10,000 retailers nationwide. With the Indian Plastic Pipes Industry expected to reach approximately INR 550 billion by FY 2026E, Apollo is poised to capitalize on this growth, driven by robust demand from tier 1 and tier 2 cities and supportive governmental policies.
Sameer Gupta, Chairman & Managing Director of Apollo Pipes, expressed optimism about the merger: “We are excited to announce that we have acquired a majority stake in KML to bring a strong West Indian brand under the Apollo Umbrella. The transaction is a strategic and financial fit that will bring significant synergies and market opportunities.”
Despite facing challenges such as working capital finance, lack of funds for modernization, and high operating costs, KML managed to generate revenue of Rs. 291 crores on a TTM basis. Apollo’s financial management strength, raw material procurement capabilities, and implementation of various systems and processes are expected to scale up the business quickly.
The acquisition of Kisan Mouldings Limited by Apollo Pipes Limited represents a significant milestone in the Indian pipes and fittings industry. This merger is not just a strategic alignment of two industry leaders but also a reflection of the sector’s evolving landscape, where eco-friendly manufacturing practices and market expansion play critical roles. Apollo’s acquisition of KML paves the way for enhanced product offerings, broader market reach, and heightened brand recognition, setting a new precedent for growth and sustainability in the industry.