MC EXCLUSIVE PE major Warburg Pincus looks to raise Rs 4,000 crore in debt for Haier India stake buy

Haier Appliances India, a wholly owned unit of Qingdao-headquartered Haier Group, entered the country in 2004 and now has a dealer network spanning 6,500 outlets

Global private equity fund Warburg Pincus is looking to raise around Rs 4,000 crore as debt to help finance the proposed acquisition of Chinese appliance maker Haier’s India business, sources directly aware of the matter have told Moneycontrol.

Kotak Investment Bank has been mandated to syndicate the debt and has approached structured credit funds and select mutual funds for participation. Leveraged buyouts typically involve 70-80 percent debt, with the remainder coming from equity.

On August 7, Moneycontrol had first reported that a consortium led by Bharti Enterprises founder and chairman Sunil Mittal, together with Warburg Pincus, had entered exclusive negotiations with Haier Smart Home Co to pick up a substantial stake in its India arm.

People aware of the matter said the exclusivity period is currently on, and a formal announcement is expected in coming weeks. The plan is for the Mittal-Warburg consortium to acquire a 49 percent stake, with Haier retaining another 49 percent and employees holding the remaining 2 percent. Both sides are expected to exercise joint control, including board seats and governance rights.

Another source pointed out that Haier has a strong supply chain and market share across categories, and Sunil Mittal - investing via his family office - has had a long-standing relationship with Warburg, which was one of the early investors in Bharti Airtel. The consortium, according to this source, is approaching the deal with a long-term horizon.

Advisory firm Citi is working with Haier on the sell side, while Kotak is advising the investors.

Formal requests for comments sent to Warburg Pincus and Kotak Group also remained unanswered until the time of filing this report.

Citi declined to comment.

A third person familiar with the deal said a formal announcement of the acquisition of the stake in Haier India is expected in the next few weeks. Previous reports have pegged the valuation of the Indian arm at about $2 billion. The company competes with Samsung, LG, Whirlpool of India, Voltas and Crompton Greaves Consumer Electricals.

Haier India's Footprint

Haier Appliances India, a wholly owned unit of Qingdao-headquartered Haier Group, entered the country in 2004 and now has a dealer network spanning 6,500 outlets. Its portfolio includes refrigerators, air conditioners, washing machines, LED panels, water heaters, and microwave ovens.

According to PTI News, Haier India reported FY24 revenue of around Rs 8,900 crore , around $1 billion, up 36 percent on year. For FY25, the firm expects sales to cross Rs 11,500 crore. Company president NS Satish had earlier told PTI that Haier is targeting annual revenue additions of Rs 2,000–2,500 crore, adding that India remains a big opportunity given the GDP growth and relatively low penetration compared with global peers.