Apollo Pipes Limited (Apollo Pipes), among the top 10 leading piping solution providing Company in India, today announced that it has completed the acquisition of Kisan Mouldings Ltd's 9,000 MTPA production unit in Bengaluru. The acquisition, which had been approved by the Company's Board of Directors in May 2019, has been concluded for a consideration of below Rs. 30 crore.
Spread over 7 acres, the facility offers scope for further expansion for Apollo Pipes in the future. In the near-term, the Company plans to incur a nominal capex to upgrade and evaluate opportunities for debottlenecking of existing facilities.
Commenting on the development, Mr. Sameer Gupta, Managing Director of the Company said, "I am pleased to announce that we have concluded the strategic acquisition of Kisan Mouldings Ltd's manufacturing unit based in Bengaluru, which will jump-start our entry into the southern markets. This facility is an integral part of our long-term vision to emerge as a PAN India player.
We have begun this year on a healthy note by registering 20% volume growth in Q1 FY20. With macros improving for our industry along with the planned capacity additions at existing facilities and the latest facility in south, the Company should close the year on a much stronger note."
The acquired facility is equipped with manufacturing lines for uPVC pipes, which is Apollo Pipes' key product segment. This acquisition in the south gives the Company a head start in its long-term plan to establish a PAN India presence. In addition, the brand recall of the group among distributors and customers is very strong in the southern markets and is synonymous with high-quality and reliability. Apollo Pipes would look to efficiently leverage this positive brand image to drive reach and volumes. It also targets to bring in higher cost efficiencies in the operations of the acquired plant. This should enable the Company to turnaround the performance of the facility leading to an attractive payback period of less than 3 years.
Shares of Apollo Pipes Ltd was last trading in BSE at Rs.398.9 as compared to the previous close of Rs. 398.55. The total number of shares traded during the day was 16209 in over 72 trades.
The stock hit an intraday high of Rs. 400 and intraday low of 393.4. The net turnover during the day was Rs. 6476230.