Bengaluru/Mumbai: Private equity major Lighthouse Funds is looking to exit its six-year-old bet in footwear maker Aqualite Industries, and it has already started early talks with prospective investors, two people familiar with the matter told Mint.
Bengaluru/Mumbai: Private equity major Lighthouse Funds is looking to exit its six-year-old bet in footwear maker Aqualite Industries, and it has already started early talks with prospective investors, two people familiar with the matter told Mint.
Lighthouse—that had invested ₹250 crore in 2018 from its third fund—for a minority stake (16.4%) in the company, is now looking to cash out its investment, the first person cited above said.
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Lighthouse—that had invested ₹250 crore in 2018 from its third fund—for a minority stake (16.4%) in the company, is now looking to cash out its investment, the first person cited above said.
“Bankers will be appointed soon, and a formal process will begin. At present, the company has held initial talks with other PE funds to gauge their interest,” the person added, requesting to remain anonymous.
Lighthouse—a leading mid-market private equity firm that typically focuses on growth investments in India’s consumer sector—includes prominent brands such as Nykaa, Bikaji Foods, Tynor Orthotics, and Fabindia, among others, in its portfolio.
Slow walking
Growth for Aqualite has been slow after the company’s performance was hit by the effects of the pandemic.
In FY23, the company managed to clock ₹922 crore in revenue, up from ₹744 crore a year earlier, as per a report by ratings agency Crisil in September 2023.
The report added that there could be a marginal increase in 2024, with revenues expected in the range of ₹950-1,000 crores, driven by the company’s shift in focus to prioritising sales in higher-margin segments.
In recent years, the company’s profitability has been under pressure due to reduced margins that have shrunk because of low bargaining power in a price-sensitive market.
The Crisil report highlighted that Aqualite has been unable to pass on the increase in prices of raw materials to customers, even as it faces intense competition from unorganized players and other established brands.
Its operating margin, which was a dismal 0.2% in FY22 and even lower during the first half of FY23, has however improved in the subsequent quarters. The company reported operating margins of 10.6% for FY23 as it benefited from…
Read More: Lighthouse Funds talking to investors to offload its stake in footwear maker