IFC to back Lighthouse's SPV to acquire stake in footwear firm Aqualite Ind

Lighthouse to invest Rs 2.5 bn to acquire minority stake in target firm, which has a strong presence in northern and easterm India, and can produce 300,000 pairs of fotwear a day

The World Bank's investment arm, International Finance Corporation (IFC), is planning to invest around $10 million in a special purpose vehicle (SPV) floated by PE firm Lighthouse India Fund, which is acquiring a minority stake in Aqualite Industries, a mass-market footwear company. Lighthouse India Fund III, an affiliate of private equity firm Lighthouse Advisors, has committed to invest over Rs 2.5 billion ($35 million) for the stake in Aqualite Industries.

IFC said i n a statement that MUSE Capital Advisors Limited (Lighthouse) offered it a co-investment opportunity in Aqualite Industries Private Limited, through its fund. The World Bank affiliate is already an investor in the Fund, which is a $183.6 million growth equity fund focused on lower mid-market companies in India. IFC invested $20 million in the Fund in 2018 and has a 10.89 per cent ownership stake in it.

IFC is planning to invest up to $10 million in an SPV, Lighthouse India III Holdings, which is a private company limited by shares incorporated in Mauritius. This SPV is acquiring a 16.5 per cent stake in Aqualite Industries for Rs 2.51 billion.

IFC said it will provide patient, long-term equity capital to support growth in order to strengthen the Company's balance sheet, improve its creditworthiness and its ability to attract investors in the capital market.

Aqualite plans to use the money to introduce new product categories and designs in a lower price range, especially for Indian customers living in tier-2 and 3 cities.

The company is also planning to tap online channels and new geographies by expanding the distribution network and increasing its district coverage especially in northern and eastern India.

Founded more than three decades ago, Aqualite offers more than 6,500 SKUs in hawai, non-hawai and shoe product categories. The products are sold under several sub-brands, under the umbrella of ‘Aqualite’.

Across its six manufacturing units in Haryana and one in Rajasthan, the company can produce over 300,000 pairs of footwear a day. It has a pan-India distribution network of 35,000 retailers, with significant presence in north and east India. The Company is expecting a turnover of over Rs 8 billion in the current financial year and targeting Rs 10 billion by 2020.