French electrical engineering and power management company Schneider Electric on Tuesday said it bought 74% stake in inverter maker Luminous Power Technologies for R1,400 crore. This deal could help the French major make deep inroads into the Indian electrical goods market.
Together, Schneider and Luminous will now have around 11,500 employees in India. Schneider earned revenues of about R4,500 crore from its India operations by the end of 2010, whereas Luminous had recorded R1,100 crore revenues for the year ended March 31, 2011.
Currently, Luminous had debt of R240 crore at the end of the last fiscal. The balance 26% stake will remain with Luminous founders, including Rakesh Malhotra, Navneet Kapoor and Sunil Bhalla, who will be actively involved in the future growth of the company in India as well as abroad.
Grant Thornton India was the sole financial advisor to Luminous on the transaction.
With this deal, India would now become the seventh largest market for Schneider globally. The joint venture now will be under the managing directorship of Manish Pant, who is currently Schneider Electric India’s director (strategy & alliances) and will continue to be known as Luminous Power Technologies.
Betting big on the strong distribution network of Luminous, Pant said the deal will help Schneider tap Luminous strong access and sales points, which stand at over 25,000 in the country. ?We will also be looking at development of new products in due course,? Pant added. Meanwhile, Luminous founder and chairman Rakesh Malhotra said, ?With Schneider Electric as a partner, we are now looking forward to an exciting growth of our current businesses in India and other parts of the world by leveraging this relationship. Luminous Power Technologies will also benefit in terms of accessing a strong product and technology platform of Schneider Electric in the area of home electricals and energy efficiency products. We will now be able to offer a more compelling and complete portfolio to our consumers and business partners.?
On the other hand, Schneider managing director (India) Olivier Blum said, ?The joint venture with Luminous will provide a strong platform to Schneider to reach out to Indian consumers.?
Interestingly, this deal is Schneider?s eighth acquisition in India, with two transactions ? APW President and Digilink ? being completed earlier this year.
According to Blum, Luminous would continue to remain as a separate entity without any branding changes.Schneider also said Luminous would also bring a customer base, with three million existing inverter users, as well as access to institutional clients in the government and telecom sectors.