Motilal Oswal PE invests Rs 350 mn in Magicrete Building Solutions

BANGALORE: Motilal Oswal Private Equity Advisors has invested Rs 35 crore in Surat-headquartered Magicrete Building Solutions, which makes lightweight concrete blocks and panels. The firm will use the funding on expansion, sales and marketing.

"Our vision is to be the largest walling solution company in the next five years," said Saurabh Bansal, founder, Magicrete.

Bansal, an industrial engineer from IIT-Kharagpur launched the firm in 2008 along with Puneet Mittal, a chartered accountant, using funding provided by a group of angel investors in Surat, Gujarat.

Magicrete makes autoclaved aerated concrete (AAC) blocks. It is light weight next generation building material strong enough to withstand earthquakes and hurricanes when reinforced with steel. It keeps out warm air in summers and cold air in winters and is resistant to fire and pests. The material can be used as a sound barrier wall along busy roads and its large size provides advantage in terms of speedier construction.

Magicrete which commenced production of its flagship product AAC blocks with an initial capacity of 150,000 cubic meters has scaled up the capacity to 800,000 cubic meters. It has also forayed into offering gypsum plaster and dry mortar.

"This industry is poised for phenomenal growth for the next several years," said Raamdeo Agrawal, chairman, MOPE. The capital for the investment in Magicrete came from India Business Excellence Fund II, a Rs 750 crore growth capital fund, managed by MOPE.

Private equity players are turning to smaller cities and towns across India in search of stellar investment opportunities, as strong business growth in companies based in these regions are providing better exit options compared to those in the metros.

Amongst those increasing their investments in non-metro areas are Motilal Oswal Private Equity, Baring Private Equity Partners and IDFC Private Equity.