Warburg Pincus is contemplating further increasing its stake in Indian ophthalmic devices and equipment manufacturer Appasamy Associates Pvt. Ltd. in which it already has a stake, according to two sources familiar with the matter.

The potential stake increase is likely to be funded via cash, said both of the sources.

The New York-headquartered private equity firm is looking to acquire another 21% stake in the Chennai-based company for about USD 110m to USD 120m, said one of the sources.

The PE wants to own a ‘significant majority’ in Appasamy Associates, said the second source.

Debtwire reported on 31 July that Warburg Pincus has acquired a 49% stake in Appasamy for about USD 270m from the Indian company’s founders. Shadow Point Investment, an entity fully owned by Warburg Pincus, has fully drawn down a USD 90m five-year secured term loan which partly funded the private equity firm’s acquisition of the 49% stake in Appasamy Associates, as reported.

The opening leverage on the term loan is 4.03x EBITDA. Under the terms of the loan, the borrower is required to pay a margin of SOFR+ 400bps if EBITDA is greater than 3.75x but pays less if Shadow Point meets certain deleveraging targets.

Warburg Pincus on 10 April announced that it acquired a stake in Appasamy, without disclosing the size of its equity purchase. The purchase marks the PE firm’s largest investment in the healthcare sector in India. Nuvama Investment Banking acted as the exclusive financial advisor to this transaction and AZB & Partners acted as its legal advisor.

Founded in 1978 and headquartered in Chennai, Appasamy Associates is the largest Indian manufacturer of ophthalmic equipment and intraocular lenses (IOLs), according to the 10 April press release. Prior to WP’s acquisition, Appasamy was 100% owned and managed by the five founding families since its inception, the release shows.

Appasamy Associates, Nuvama, and Warburg Pincus did not respond to requests for comments.