New Delhi-based consumer durable company Usha Shriram Enterprises is looking to offload nearly 25 per cent equity stake in its lighting business for around Rs 40-50 crore and is in the final stage of negotiation with Gurgaon-based electrical solutions provider Sudhir Gensets, The Economic Times reported, citing a top company executive.
Usha Shriram produces a range of lightening products such as LEDs, luminaries and CFL lamps under the brand name of Usha. The fund raised in the transaction will be used to augment the company’s lighting business.
"The final shareholding pattern (for equity dilution) is yet to be finalised," Usha Shriram’s managing director Anupam Bharat told the newspaper.
Usha Shriram expects to achieve a turnover of Rs 500 crore in five years against Rs 129 crore currently. At present, the company’s lighting business contributes around 54 per cent to its total turnover.
It is a bit player in the lighting industry dominated by names like Phillips, Osram, Havells and Surya. The current size of the India lighting industry is pegged at around $1.5 billion and is growing at 15 per cent to 20 per cent.
“We hope to achieve a turnover of 350-400 crore in the coming three years in the lightning industry. Our major thrust would be on CFLs and LEDs,” Bharat said.
Usha Shriram operates in areas such as home solutions, hospitality, health care and cleanliness, electronic and lighting products, kitchen appliances, and consumer durables.
For Sudhir Gensets, this could mark an entry into lighting business and also expand its target market to include the consumer segment. The company offers diesel or gas gensets, including genset controllers and has annual revenues of over Rs 1,000 crore with net profit of Rs 100-150 crore a year.
It also provides distribution solutions, such as HT panels, LT panels, transformers package, substation and power generation solutions, apart from offering electrification solutions, including HT and LT distribution systems, internal electrification and lighting, fire alarm, etc.
In 2007 it raised funding from Goldman Sachs and GE Capital.
(Edited by Joby Puthuparampil Johnson)