Acad Group 01_Rico Auto Industries.pdf - Raising Private...

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Academic Group 1 Aashank Ambe-PGP-19-001 Aditi Patni-PGP-19-005 Karan Vats- PGP-19-27 Kriti Sharma- PGP-19-030 Arpit Bhatt- PGP-19-174 Investment Banking, Private Equity and Venture Capital Raising Private Equity in India
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Case Background Rico Auto Industries An India based designer and manufacturer of auto components and assemblies Initially sewing machine manufacturers. Gradually, diversified into high precision auto components from 1984 onwards Founded by Arvind Kapur (Current - MD and CEO). Listed on BSE and 51% shares held by Kapurfamily History Operations Characteristics Major supplier to Indian and Global firms FY 2004 Revenue = $161 MN ($3.8 MN of exports included) (grew at a CAGR of 30%); PAT = $11 MN (7.04% profitability) In a 50:50 J.V. with FCC (Japan) In house CAD/CAM/CAE capabilities Conformance to ISO/TS16949 quality certification in manufacturing Among Top 10 domestic producers and Top 30 exporters of auto components in India Future Strategy and Plans Domestic Strategy Consolidate and grow with the existing customer base. Also, explore possibility of gettingnew customers Export Strategy Focus on purchasing program of future products and platforms by building design expertise and manufacturing flexibility with alow cost model Plans (i) New plants in South Indiaand Manesar (ii) Acquisitionsin US or India (iii) Increase castingcapacity (ferrous by 50% and aluminum by 33%) (iv) Add new CNC machines and R&D facility to include more value added components in the productline How to fund these plans and the expansion strategy? PIPE Debt Instruments Joint Venture Partnership with Global Firms
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Industry & Company analysis at the time of the deal Headquartered in Gurgaon Engaged in manufacture of auto components and assemblies Reputed global customers such as Ford, Cummins, Caterpillar, Volvo, etc.
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  • Fall '19
  • joint venture, Rico Auto Industries

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