Warburg Pincus, private equity firm has decided to invest Rs 1,080 crore (nearly USD 150 million) in Apollo Tyres.
“The company’s board has approved an issuance of compulsorily convertible preference shares in the company worth Rs 1,080 crore to an affiliate of Warburg Pincus,” said by Apollo Tyres Ltd.
A primary capital infusion is represented by this investment and depends upon shareholder and regulatory approvals.
"Their (Warburg Pincus) investment is a strong vote of confidence in our business, management team and growth prospects. I believe the company will benefit from the backing of a large financial investor of their pedigree and our partnership
will further strengthen Apollo Tyres' board and governance," Apollo Tyres Chairman and Managing Director Onkar S Kanwar said.
Commenting on the development, Warburg Pincus India Managing Director Vishal Mahadevia said,” We see a compelling growth story in Apollo Tyres and believe the company is well-positioned to build upon the strong leadership position it has carved out within the industry.”
Warburg Pincus is showing huge interest in working with Apllo Tyres and looking forward to supporting them during the next phase of the company’s growth.
BSE reported shares of Apollo Tyres on Wednesday to fall which closed 3.59 per cent less at Rs 148.85.
The company announced in its stock market filing that on-going capital expenditure programmes will be funded by Apollo. Up to 10.8 crore of funding is approved by the board of directors for compulsorily convertible preference share with the face value of Rs 100 respectively for an aggregate amount of Rs 1,080 crore to investor Emerald Sage Investment (owned by Warburg Pincus Group).
The company also introduced an interim dividend priced Rs 3 per equity share and its face value is Re 1 for Financial Year 2020. Apollo tyre is investing both in India and overseas. In the current fiscal, it has announced capital expenditure of just Rs 3000 crore. Earlier, it had pumped Rs 4,000 crore in its new plant in Hungary, which was commissioned in 2017. It is also going to establish new plant in Andhra Pradesh and expanding capacity at its Chennai plant.