Funds managed by Motilal Oswal Private Equity, India SME and Motilal Oswal Finvest Limited invest in Simpolo Group
September 3: India Business Excellence Fund – IV, a fund managed and advised by MO Alternate Investment Advisors Private Limited (“MOPE”), along with India SME Investments – Fund I and Motilal Oswal Finvest Limited have completed an investment of USD 66 Mn in Simpolo Group, India’s largest luxury and premium tiles manufacturer. Simpolo Group includes the flagship company Simpolo Vitrified Private Limited and Nexion International Private Limited.
Established in 2008, Simpolo Vitrified Private Limited is the market leader in the premium tiles segment in India, is promoted by first generation entrepreneur Jitendra Aghara and is based out of Morbi, Gujarat, one of the largest tiles manufacturing districts in the world. Simpolo has a pan India presence with a robust network of 1,100+ dealers and exports to over 50 countries. Established in 2015, Nexion International Pvt Ltd is a JV between Simpolo promoters and the promoters and former owners of Emilceramica SpA, an Italian company established in 1961 and one of the global leaders in the luxury tiles segment. On a consolidated basis, Simpolo and Nexion are the largest player in the high-end segment of the Indian tiles market, with revenues of ~USD 150 Mn in FY 2022.
Post completion of the transaction, the Group’s strategy – so far so successful – will remain the same. Simpolo and Nexion will continue to operate as independent entities; Simpolo is the Brand of Choice in the Premium market and Nexion is the leader in the Indian luxury segment.
The Group will use the financial resources, access to best practices and the skills contributed by MOPE to capture market share and grow penetration in India and abroad, enabled by targeted investment in sales, advertising and promotions, and to expand the current capacity in tiles and sanitaryware, improve logistic and enhance customer service. Simpolo sanitaryware division will also expand into the faucets sector.
Jitendra Aghara, Group CMD, Simpolo Group said, “We are delighted to have MOPE as our partners. Both organizations share the common vision to build one of the largest brands in the building materials industry in India. Over the last 15 years, we have created a differentiated presence in the premium tiles segment in India, and MOPE’s investment underscores the strength of our brand premiumness, product quality and deep distribution network. MOPE’s experience to create leaders in the manufacturing sector and the expertise gained from their real estate fund will be instrumental in elevating Simpolo Group to one of the leaders in the building materials industry in India.”
Vishal Tulsyan, MD and CEO of MOPE said, “We are excited to back a passionate first-generation entrepreneur like Jitubhai, who has built a strong management team along with forging a strong partnership with Italian promoters, who have created the strong and credible high-end brand Nexion. Simpolo has all the right ingredients to be the most valuable tiles company in India in the coming years.”
Luca Majocchi, CEO of Nexion said, “MOPE’s investment validates our thesis that India will become one of the largest premium tiles markets in the world, the driving element supporting our investment in the country. In 2015, we partnered with the Simpolo promoters with the shared vision of creating an Italian company in India. Today, Nexion is beloved by customers and architects alike due to the beauty and quality of its products, and this is reflected in the growth we have demonstrated over the last 6 years. As India economy and society continue to develop, we expect the luxury tiles market in India to grow exponentially.”
Prakash Bagla, Director of MOPE said, “We believe that the luxury and premium tiles segment in India is poised for rapid growth, as the share of high-end tiles will increase from less than 10 per cent today to 30-40 per cent as seen in developed markets. Simpolo and Nexion, with their focus on innovative designs, superior product quality, widespread dealer network and brand positioning is well placed to capture this growth and become a leading building materials player in India”.
Mitin Jain, Founder of India SME Investments said, “Simpolo’s management team has established a benchmark for providing world-class quality products at globally competitive cost-economics, which reiterates the ‘India Shining’ story. We are glad to be a part of this journey backing Jitubhai’s vision to become the most valuable company in this segment in India.”
Motilal Oswal Investment Advisors has acted as an exclusive financial advisor to the Simpolo Group.
Wadia Ghandy & Co, AZB Partners and JSA Advocates & Solicitors were the legal advisors to the transaction.
Simpolo Vitrified, founded in 2008, is one of the market leaders in the premium tiles segment in India. The Simpolo Group started in 1977, with the roof tile products and entered through Simpolo brand in sanitaryware business in 1991. Simpolo now is engaged in the business of designing, manufacturing, supplying and distributing wide range of premium products in tiles and sanitaryware segment. The company offers its products to builders, architects and home owners, both in India and outside India through a network of over 1100 dealers with export to over 50 countries. Simpolo has always been industry leader in introducing the latest technology in the Indian market with high quality standards and has the best-in-class manufacturing facilities in Morbi, Gujarat. Company has managed to create a strong brand recall in the mind of consumers.
Nexion International is the only design in Italy and made in India manufacturer of sintered stone slabs in the luxury segment of the slabs and tiles market in India. The company, established in 2015 to bring world renowned Italian design and quality to Indian architects and consumer, is a partnership between two large family groups that have always been leaders in their reference markets: Ceramiche Speranza (formerly Emilceramica), one of the best Italian firms, founded in 1961, that has setup the state of the art manufacturing facilities in India together with Simpolo’s Promoters. In less than 6 years, Nexion has become the leader in the luxury segment of the Indian ceramic market with a reach of almost 300+ dealers across India and exports to the most important markets worldwide.
MO Alternate Investment Advisors Private Limited (MOPE) is a subsidiary of Motilal Oswal Financial Services Limited (MOFSL), a diversified financial services group with businesses in Securities, Asset Management, Housing Finance, Private Equity and Investment Banking. MOPE is managing both private equity and real estate funds and cumulatively manages around USD 1.7 bn between the two asset classes. The private equity vertical focuses on providing growth capital to mid-market companies across its preferred sectors of consumer, financial services, life sciences and niche manufacturing, typically in the range of INR 2,000 – 5,000 million. The private equity vertical has, in the last 16 years, made over 36 investments in the last 16 years and has completely exited 15 investments, having delivered a gross MOIC of 5.3x (INR) and gross IRR of 25.9 per cent (INR), making it one of the top performing platforms in India. Many portfolio companies of MOPE have, over the years, scaled to between USD 3-7 bn companies from less than USD 100 mn at the time of investment.
India SME Investments was established in 2019, the Fund is sector agnostic and focussing on investing in early-growth small and mid-size companies. Simpolo is India SME’s 9th investment and has earlier concluded deals in the FinTech, retail, branded food processing, manufacturing and B2B platform businesses. Investments include KrazyBee, SmartCoin, LokSuvidha, Citykart, Kushal’s, Priniti Foods, Venus Pipes and Source.One.
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