Roca buys into Parryware Glamourooms for €50 million

21 April 2006

Chennai: The €1.7-billion turnover bathroom fittings major Roca of Spain has bought 50-per cent stake in the Parryware Glamourooms Private Limited for €50 million (around Rs275 crore). The latter, part of the city's $1.6-billion Murugappa group manufactures the Parryware brand of bathroom products.

The Rs250 crore revenue Parryware Glamourooms was a division of EID Parry (India) Limited. In 2005 the Murugappa group decided to hive it off into a separate company, started looking out for foreign partners, and finally signed up with the Roca.

The Spanish group would pay the consideration to EID Parry. "We will also put in more money if needed. We will do that after getting the sanction from India's Foreign Investment Promotion Board (FIPB) for the present investment," said Roca's CEO Jose Miguel Roca. A name change to reflect the new equity holding pattern will be considered once FIPB approval is obtained.

According to him, Roca would also consider sourcing some products for its global market from the Indian venture.

"The enterprise valuation was mutually agreed between the two parties to the agreement," said vice chairman, EID Parry A Vellayan. According to him, the group is changing with the times. In the '80s the group bought out the stakes of its collaborators in its companies as it felt that they did not add any value. "Now we partner with others in products where they could add value."

The Parryware Glamourooms commands a market share of 42 per cent in the domestic bathroom ceramic product market and has a turnover of around Rs250 crore. For FY 2005 the Parryware range of products fetched Rs195 crore and a profit of Rs23 crore on a capital employed Rs97.32 crore. The company has three functioning plants and one would go on stream shortly. Given these, with technology acting as an entry barrier, and the fact that the Roca brand is aimed at the market's super-premium category, couldn't the group have got a higher price?