HIL Acquires Patna-Based Crestia Polytech for Rs 265 Crore

New Delhi, March 11: CK Birla Group firm HIL Ltd announced the acquisition of Patna-based Crestia Polytech, the maker of the Topline brand of pipes and fittings, along with its four other subsidiaries, at an enterprise value of Rs 265 crore. This strategic move is expected to bolster HIL's presence in the rapidly growing pipes and fittings segment, a new venture for the company.

Representative image

Expanding Market Reach

Crestia Polytech and its wholly-owned subsidiaries, including Topline Industries, Aditya Polytechnic, Aditya Industries, and Sainath Polymers, hold a strong position in Eastern India's pipes, fittings, and water tank segments with their renowned brands Topline, Rockwell, and Soniplast. HIL's Managing Director and CEO, Akshat Seth, highlighted that the acquisition involves taking over 100% ownership of Crestia Polytech, with an equity value of approximately Rs 125 crore and a debt of Rs 140 crore. HIL will assume the existing debt, while financing the equity component through a combination of internal accruals and bank borrowings.

Driving Future Growth

Seth emphasized the significance of the acquisition, stating that pipes and fittings represent a crucial part of HIL's portfolio and will significantly drive the company's future growth. This strategic move aligns with HIL's ambitious goal of achieving USD 1 billion in revenue within the next three years. To realize this vision, the pipes and fittings segment must grow at least five times its current size during this period. The acquisition of Crestia Polytech plays a pivotal role in achieving this objective.

Enhanced Capacity and Capabilities

Seth further explained that the acquisition not only doubles HIL's revenue from pipes and fittings, bringing it closer to the Rs 1,000 crore mark, but also triples its production capacity. Currently, HIL's revenue from this segment stands at around Rs 400 crore, and it is projected to reach Rs 2,000 to 2,500 crore within the next three years. The acquisition adds a substantial 83,000 metric tons per annum (MTPA) to HIL's existing capacity of 35,000 MTPA, resulting in a combined capacity of approximately 1,15,000 MTPA.

Strategic Footprint in Eastern India

With this acquisition, HIL expands its manufacturing footprint to include Eastern India, complementing its existing plants in North, West, and South India. Avanti Birla, HIL's President of Strategy, emphasized that the acquisition of Topline aligns perfectly with the company's growth strategy for the pipes and fittings business. The combined strengths of both organizations will broaden the product portfolio, enhance manufacturing capacity, and extend market reach.

Access to New Segments and Technologies

The acquisition of Crestia Polytech provides HIL with access to new market segments and innovative technologies. The company gains entry into segments such as HPPE (high-performance polypropylene pipes), MDPE (Medium Density Polyethylene pipe), electrofusion, and water tanks, where it previously had no presence. Seth highlighted specific patented technologies, such as insulation-based technology in water tanks and electrofusion capabilities, which are unique and valuable additions to HIL's offerings.

Expanding Customer Base and Distribution Network

Furthermore, the takeover allows HIL to tap into new customer segments, including the business-to-government (B2G) sector, where Crestia Polytech has established relationships and approvals in 12 states across India. The company works extensively with government departments in programs like Jal Jeevan Mission, natural gas grid, and PM Ujjwala scheme. Additionally, Crestia Polytech's strong channel presence, with a dealer network spanning 15 states, complements HIL's portfolio and is expected to accelerate growth in the pipes and fittings segment.

Integration and Future Plans

HIL intends to integrate Topline as a brand within the HIL umbrella over the next two to three years, while maintaining its independent existence. This strategic acquisition positions HIL for significant growth and diversification in the pipes and fittings industry, leveraging the strengths of both companies to capture a larger market share and drive future success.