Leading battery maker Luminous, part of Delhi-based diversified conglomerate SAR Group, will hit the capital markets within a year. SAR Group founder and CEO Rakesh Malhotra told FE that the Luminous brand of companies, which are into power backup solutions and renewable energy, would go for an initial public offer (IPO) in a bid to expand its existing product portfolio.
?We have already begun some preparatory work for coming out with an IPO…I would imagine within a year we would be done with it,? Malhotra said. This would be the second round of funding for the company. In 2007, leading private equity firm CLSA Capital Partners had invested around $20.3 million to power the company’s expansion drive.
Malhotra added the IPO would give the PE firm an exit opportunity. The group would also be able to raise funds to expand capacities across its business verticals. ?We don’t need to raise a lot of capital immediately but in a year’s time we would need a lot more money. We are pretty well-capitalised with almost no debts,? he added.
The power business of the SAR Group, Luminous Power Technologies, contributes substantially to the group’s overall revenues. In 2009-10, the group had an overall revenue of Rs 1,000 crore. Of this, Rs 750 crore was from its power business alone. Malhotra said the power business could double revenues to Rs 1,500-1,600 crore within a year.
?We have a fairly strong balance sheets. For day-to-day operations, it’s fine. As we go forward we will be getting into more capital intensive activities as well,? he added. He said that the group’s telecom infrastructure business has developed solutions for energy savings for telecom towers. ?Now it has reached a point that in the next couple of years it will have a capital expenditure model,? Malhotra said.