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Online extra: India’s smaller companies go on a buying spree

High-ticket foreign purchases by Tata Steel and Hindalco have grabbed the headlines but India’s SMEs are also increasingly acquisitive. Cash-rich, or funded by enthusiastic local banks or foreign investors, they are taking advantage of turmoil in the US. Elliot Wilson reports.

SAPAT TEA IS a classic Indian growth story in the making. Privately run and awash with cash after a decade of strong domestic growth, the country’s third-largest tea maker and blender is on the hunt for foreign acquisitions. Armed with a war chest of more than $60 million, Mumbai-based Sapat wants to buy at least two high-end tea brands over the next 12 months – one in the US (its budget: $20 million) and one in the UK (budget: $40 million). Its management will finance the deals around 50% with cash, with the rest funded by a mixture of leveraged buyouts and, says Sapat’s managing director, Nikhil Joshi, "a sprinkling of private equity".

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