Kurlon nearing much-delayed funding

Kurlon Ltd, the Bangalore-based mattresses company, is understood to be finalising its move to raise Rs 200 crore through the private equity route, more than a year after it started discussions to raise resources for expansion. However, in addition to the earlier focus of raising funds from pure-play financial investors, it is understood that the company has opened up discussions with strategic investors, including Reliance Industries.

Global private equity funds Fidelity, Carlyle among others are understood to have discussed options to pick up a minority stake in the company, with Fidelity in advanced stages of negotiations for the transaction. It is understood that Kurlon will be raising around Rs 200 crore by diluting around 15 per cent stake. While the private equity funds could not be reached for their comments, Kurlon declined comment and Reliance Industries said it does not comment on market speculation.

Kurlon Ltd is a Rs 750 crore company of the Manipal Group and has around 20 per cent market share in the Rs 4,000 crore branded mattresses business in India. It is understood that Kurlon is looking to raise funds to stimulate its expansion plans and double its manufacturing capacity in India. It is further learnt that the company will be infusing resources to its ongoing repositioning efforts and emerge as a player in the comfort industry rather than a major player in just the mattress business. Thus operating on a larger canvas, the company will have more room to grow and will manufacture a whole wide range of products in home comfort. The company started its business in 1962 and manufactures, supplies and sell rubberised coir mattresses, foam mattresses and spring mattresses; polyurethane foam (PU foam); pillows, cushions and bolsters; home furniture and furnishing products, all under the brand name 'Kurl-on'. The company currently has 6,380 dealers, 55 area sales offices and a workforce of 1,570 employees across India and is led by Sudhakar Pai.

It is understood that Maha Rashtra Apex, an NBFC owned by the Manipal Group, which ceased to operate in 1999 holds around 35 per cent stake while the rest is held by the promoters. The company has three manufacturing units in Bangalore, Gwalior and Bhubaneshwar and is understood to be churning out a million beds per annum. The Company products are exported to West Asia viz; UAE, Qatar, Oman, Bahrain, UK, Europe, South and East of Africa, Indian Ocean rim, SAARC, South East and Far East Countries.