Furniture fittings and architectural hardware specialist Ebco’s promotors have sold a majority equity stake to Warburg Pincus. The Nagpal family, Ebco’s promotors, will continue to hold a significant minority stake and will be actively involved in the future growth of the company. Warburg Pincus is a global private equity investor with more than $83 billion in assets under management, and an active portfolio of more than 225 companies that are highly diversified by stage, sector, and geography.
Ebco Pvt Ltd is among the largest players in this sector in India. Its revenues for financial year 2022-23 stood at around Rs 791 crore, and are expected to touch Rs 850 crore in the following year.
Media reports have stated that Warburg Pincus may have acquired at least a 75 per cent stake in Ebco at a valuation of Rs 3,000 crore. Other private equity funds, including TPG, KKR, and Kedara, have also shown interest in this acquisition.
Founded in 1963, Ebco started as a tool room and supplier of shells to the defence industry. In the ‘80s, the company leveraged its engineering prowess to diversify into the manufacturing of furniture fittings and architectural hardware. It pioneered several fittings in India, including the spring cabinet hinge, friction stay and the angular door stopper.
According to the company, its product range comprises 4,500+ SKUs across categories like bed and wardrobe fittings, kitchen systems and accessories, office furniture fittings, window and door hardware, and furniture lights. It has a distribution network of over 5,500 retail touchpoints across the country and operates three state-of-the-art manufacturing plants in Maharashtra with robust R&D and design capabilities.
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Speaking about the development, Ebco’s promotor and managing director Geoffrey Nagpal says, “Ebco’s leadership position today is a testament to its wide and high-quality product basket, deep manufacturing capabilities, and extensive distribution network. I have been fortunate enough to witness the company’s transformation over the last 60 years alongside Ashley Nagpal, Rajesh Nair, and Nishant Nagpal, who have been pivotal in the journey of Ebco’s evolution into one of India’s most trusted brands in this space. The company is at an exciting phase of growth, and we are thrilled to partner with Warburg Pincus at this stage. This partnership will enable the company to capitalise on the strong industry growth prospects, deepen its presence in every part of the country, and grow as a manufacturing powerhouse supporting the Make in India initiative of the government.”
According to Nagpal, the stake sale is a strategy to unlock the value of the Ebco brand, at a time when the Indian furniture and home improvement industry is witnessing double-digit CAGR. The timing of the sale is also significant given the spate of investments in this sector from domestic and international sources in the form of capex, strategic investment or partnership.
This outlook is confirmed by Anish Saraf, managing director of Warburg Pincus India, “We believe that the Indian furniture fittings and architectural hardware industry is poised for significant growth over the next several years, underpinned by tailwinds from favourable demographics fuelling real estate demand, rising furniture modularization, and increasing home renovations. Ebco has been a pioneer in this industry with its innovative, functional, and high-quality products. We are highly impressed with the company’s journey so far and believe it is well-positioned to capitalise on these tailwinds. We look forward to partnering with Ebco as it embarks on its next phase of growth.”
According to a report by Invest India, the nodal investment agency set up by the Ministry of Commerce and Industry, the domestic furniture market is expected to grow from $17 billion (Rs 1.45 lakh crore) in 2021 to $37 billion (Rs 2.98 lakh crore) in 2026.
The government has identified furniture as one of the champion sub-sectors with the potential to take the made-in-India label across the globe. Because of this perceived potential, a supportive policy framework appears to be taking shape. The steps include an increase in effective import duties, conceptualisation of furniture parks and clusters in states, incentivisation of lean manufacturing practices by MSME ministry, issue of Quality Control Orders (QCOs) by DPIIT to provide level playing field and focus on skilling and making the furniture industry aspirational from a career perspective.
