Engineering solution provider Voltas is in the running to acquire Wipro?s water business, sources close to the development said. For over six months now, Wipro has been evaluating options to divest the unit that provides water treatment solutions, as it wants to focus on its core businesses.
Voltas, a Tata group company, provides water management and treatment solutions through its electro-mechanical projects and services business ? a unit that contributes 54% of Voltas? financial year 2011 revenues of R5,169 crore. The firm has been looking to scale up its water management business and carried out organisational and leadership changes last financial year. A Wipro spokesperson said that the firm wouldn?t comment on the issue because it was in its silent period. Other executives, FE spoke to, said the water business was definitely on the block. A Voltas spokesperson said that the firm does not comment on speculation.
Wipro commenced its water business in March 2008, after it acquired Aquatech Industries. Since then Wipro has invested in technology and processes to scale up the business. Wipro?s water division provides for products such as flocculators, dual media filters, activated carbon filters, softeners, reverse osmosis systems etc. Wipro and Voltas already share a deep relationship. Voltas? latest annual report says that the company had secured orders for providing reactor clarifiers used in the pre-treatment of water for thermal power generation from Wipro in 2011.
Wipro?s water business is an arm of Wipro Infrastructure Engineering, the global hydraulics business of Wipro. The Infrastructure Engineering business currently constitutes less than 10% of the conglomerate?s revenues of $6.98 billion but Pratik Kumar, the president of the division, recently told FE that the unit can generate a billion dollars for the company in five years.
The division primarily sells hydraulic cylinders and truck hydraulic solutions but has recently entered the aerospace and defence market bagging its first order for the manufacture of hydraulic actuators from Spanish firm Compania Espanola De Sistemas Aeronauticos (CESA), an arm of aerospace giant EADS.