Warburg Pincus leads race to buy stake in Pricol unit valued at ₹5,000 crore

New Delhi: Warburg Pincus has emerged as the frontrunner to acquire a minority stake in a demerged unit of Pricol, a Coimbatore-based listed auto parts maker, people familiar with the matter said.

Attracting interest

The business unit, which makes digital dashboards and instrument clusters for two-wheelers, could be valued at ₹5,000 crore, they said. It accounts for around half of Pricol's annual revenue of about ₹4,000 crore.

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Warburg Pincus is in talks to pick up a 10-20% stake that could require a fund infusion of ₹500-1,000 crore, depending on how the final terms are agreed, the people said. The business had attracted interest from at least two other global private equity funds as well, but Warburg Pincus edged ahead in the race, the people said.

Pricol promoter Vikram Mohan and his family are not selling any stake and the fund infusion from Warburg Pincus will be used to meet capital expenditure plans and for inorganic growth opportunities, the people said. Warburg Pincus and Pricol did not respond to ET's queries until press time Wednesday.

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The demerger plan of the company has yet to receive formal approval from the National Company Law Tribunal. The business is called Driver Information and Connected Vehicle Solutions.

Pricol's other main businesses-actuation, control and fluid management-will continue to be housed in the existing company. The company's customers include TVS Motor, Ather Energy, Honda Motorcycle and Royal Enfield.

Pricol recently acquired injection moulding business of Sundaram Auto Components for ₹215 crore, diversifying its presence to injection moulded components such as fenders and body panels for two-wheelers. It also makes fuel pumps for two-wheelers and water pumps for customers such as Caterpillar.