Domestic mattress maker Sheela Foam is reportedly acquiring rival Kurlon for Rs 2,000 crore.
According to an ET Now report, should the deal go through, Sheela Foam will have a market share of more than 50 per cent in the organised mattress market.
The industry size ranges from Rs 15,000-17,000 crore. On the other hand, the unorganised sector accounts for 65 per cent of the industry.
Sheela Foam, which is the only listed mattress player, is present in polyurethane foam and has brands such as Sleepwell, Feather Foam and Lamiflex in its portfolio. According to the BSE data, it posted revenues of Rs 2,124.44 crore for the year ended March 31 during which the net profit came in at Rs 197.31 crore.
Bangalore-based Kurlon has a network comprising more than 10,000 dealers, 72 branches and stock points and nine manufacturing facilities across states such as Karnataka, Odisha Madhya Pradesh, Uttaranchal and Gujarat.
The news of the acquisition drove up the Sheela Foam stock and it ended Rs 22.25, or 1.75 per cent, higher at Rs 1,296.90 on the BSE.
Kurlon was once the No. 2 player in the market with a share of 26 per cent. But it has now fallen to the third place, ceding ground to Duroflex, which is now the second largest mattress maker in India.
In November, the board of Sheela Foam had declared a bonus issue in the ratio of 1:1.