Supreme Industries Ltd share price will be in focus as the company and Orbia Building & Infrastructure Business Wavin announced a Groundbreaking Partnership to Transform Water Management in India.
The company has signed a Memorandum of Understanding with Wavin Industries on March 10th to acquire its India’s piping (building and infrastructure) business, at an aggregate consideration of US$ 30,000,000 (United States Dollars thirty minions) plus net working capital on the closing date.
The Supreme Industries Ltd. (“Supreme”), India’s largest plastic pipe manufacturer, and the Building & Infrastructure (Wavin) business of Orbia Advance Corporation, a global leader in pipes and fittings, today announced their intention to enter into a long-term partnership agreement.
Under the agreement, Supreme will acquire Orbia Wavin’s pipes and fittings business in India and will have Exclusive access to Orbia Wavin’s leading water management technologies in India and SAARC countries. This strategic initiative will expand Supreme’s leadership position, extend Orbia’s customer reach through technology, and accelerate the robust growth of India’s building and infrastructure industry.
The terms of the partnership agreement include the transfer of Orbia Wavin’s manufacturing facilities in India to Supreme as well as offering exclusive licensing access of Orbia Wavin’s broad technology portfolio to Supreme, including leading-edge solutions for water supply and sanitation, city-scale water management, agriculture, rainwater collection and reuse, and stormwater management.
With Supreme’s leading manufacturing footprint across India and extensive market reach through its committed distribution network of dealers and retailers across the country, The agreement provides the large-scale platform to deploy Orbia Wavin’s advanced technologies and strengthens Supreme’s leadership position for residential, commercial, industrial, and agricultural water infrastructure solutions across the subcontinent.
Details of the deal
The acquisition includes the Piping (building and infrastructure) business of Wavin, at its manufacturing units situated at Banmore (M.P.), Hyderabad (Telangana), and Neemrana (Rajasthan) – either on Slump Sale or Share acquisition basis comprising of all tangible fixed assets, tools, moulds & dies, spare parts, all intangible fixed assets including trademarks & Intellectual property rights, all licences, approvals and permissions, contract for power & other utilities, all material contracts, orders, rate contracts in hand and
employees.
Simultaneous to the above acquisition, the Company will have exclusive access to all existing technologies
from “Wavin B.V.” – Netherlands (Parent Company) and other new technologies to be developed during 7 years for India and SAARC Countries. The acquisition is done at an aggregate amount of USD 30 million plus net working capital as on the closing date. Exclusive access to existing and new technologies shall be subject to lump-sum annual payments and running royalties, Supreme Industries informed exchanges.
About Orbia (parent company of Wavin Industries)
Orbia is a global company driven by a shared purpose: to advance life around the world. Its Building & Infrastructure business, represented by the commercial brand Wavin, is a global leader in pipes and fittings and a pioneer in water management solutions, serving over 90 countries with innovative products backed by more than 65 years of expertise. Orbia operates actively in over 100 countries and has headquarters
in Boston, Mexico City, Amsterdam, and Tel Aviv.
About Wavin India
Wavin India is presently engaged in the Manufacturing of PVC Pipes & Fittings, CPVC Pipes & Fittings, HDPE Pipes, PPR Pipes, and other products in the Building and Infrastructure segment. Wavin India was Incorporated on 30th August, 2007.
lt started the Plastic Piping Business in 2017 and gradually increased its installed capacities from time to time. Present installed capacities comprise of PVC Pipes & Fittings 39884MT, CPVC Pipes & Fittings 16608 MT, HDPE Pipes 13764 MT, PPR Pipes 1815 MT, Other Products 981 MT, aggregating to 73,052
MT per annum.
For FY2021- 22, FY2022- 23, and FY2023- 24, the Product Turnover of the company was Rs. 953.70 crores, Rs.1112.70 crores, and Rs.1007.50 crores, respectively.
Supreme Industries Ltd share price
Supreme Industries Ltd share price made a high of 6,450 in June 2024 and has fallen close to 50% since then. The stock is trading at Rs. 3,356, and the stock is trading below all important moving averages. The 20D EMA of the stock is in the 3550-3570 range, and the stock should cross that level to negate some weakness; below it, the trend of the stock will remain very bearish.
If the stock falls below 3,300 (recent lows), it will have immediate support in the 3150-3170 zone. The big support for the stock is at the 2650-2750 range, which it should defend (even in the worst-case scenario).
Conclusion
Supreme Industries is a leader and a trusted brand in India’s plastic product solution segment. Wavin’s acquisition is another step towards achieving the company’s aggressive CapEx. Co reached an annual capacity of 820,000 MT by December 31, 2024, with plans to expand to 900,000 MT by FY 24-25 end, and with close to 73,000MT addition with this acquisition, it will easily surpass it.
This deal will add 1,000 to 1,200 cr in co’s topline, and at an estimated growth of 15% in FY26 EPS, co is trading at a P/E of 36-37 (FY26 estimates), which is at a discount to the company’s historical valuation; investors should keep the stock on their watchlist and can add at above mentioned levels keeping a long term (15 months +) view in mind.
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