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| Citigroup, Stanchart pick up stakes in Sundaram Multi Pap |
| Ravi Menon / Bangalore Nov 17, 2009, 18:06 IST |
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The private equity investment arms of Citigroup and Stanchart India have purchased 8 and 2 per cent equity stake respectively in leading stationery products manufacturer Sundaram Multi Paper Ltd (Sundaram Multi Pap) from the secondary market.
Market sources did not specify when the purchases were carried out. "The company has been pushing its virtual class vertical through its recently constituted subsidiary Sundaram Edusys. They are on a massive expansion drive in schools across Maharashtra. The virtual class vertical is perceived as a future value driver by Citigroup and Stanchart," sources said.
Amrut Shah, chairman and managing director, Sundaram Multi Paper Ltd, confirmed the development. The company is investing Rs 7 crore for its expansion plans in Maharashtra where it is targeting about 2 per cent of the 55 lakh school students and 10 per cent of the schools and coaching classes in Maharashtra over the next 2-3 years.
Shah, however, denied any plans by the company to dilute co-promoter equity to raise funds for the expansion of Sundaram Edusys Pvt Ltd, by diluting co-promoter equity. "There are no plans to dilute promoter equity at this point of time as we have the required funds for expansion," Shah said.
Sundaram Edusys, the company’s educational multimedia subsidiary formed in July this year, develops multimedia content and ‘Virtual Classroom’ software for high school students. The product features the core syllabus of each subject with a real and animated teacher in a virtual classroom with a window for interactive sessions for students to raise queries for further clarifications.
Sundaram Multi Pap is promoted by Amrut P. Shah and Shantilal.P Shah, and manufactures over 200 varieties of paper stationery products under the ‘Sundaram’ brand. Its paper stationery products are targeted primarily at the education sector. It also targets the corporate sector through office stationery products and eco-friendly copier paper under the brand ‘Mr Green’.
The company has the capacity to convert 90 tonnes of paper per day into paper stationery. It has a market share of 15 per cent in the school paper stationery market in India, estimated at Rs 10,000 crore annually. The office paper stationery market in India is worth Rs 5,000 crore annually. Both the school and office paper stationery market are growing 15 per cent per annum, according to company estimates.
Sundaram Multi Pap posted revenues of Rs 28 crore for the quarter ending September 30 and Rs 129 crore for the fisal year ending March 31, 2009.
Besides Sundaram Multi Pap, other key players in the organised stationery market are Navneet Publications, ITC, Ballarpur Industries Ltd and Blue Bird.
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