Kochi-based public-listed consumer electrical and electronics company V-Guard Industries said with Sunflame acquisition, its kitchen appliances business will reach near about `500 crore.
The company said it would independently drive both the brands and will come out with a strategy on what will be the brand architecture and the price position segments in the due course.
Mithun Chittilappilly, MD, V-Guard, told during an investors’ meet that the combined V-Guard and Sunflame business will reach `500 crore in which V-Guard accounts for about ` 140 crore and Sunflame contributes about `350 crore. He said at the moment, there is no plan to integrate and both will run as separate teams.
V-Guard Industries had announced that it has signed definitive agreements for acquiring 100% stake in Sunflame Enterprises Pvt Ltd (SEPL) for a consideration of `660 crore.
Chittilappilly said V-Guard is keen to retain all team members of Sunflame. There are roughly 300 to 350 employees in Sunflame. “Our focus will be to retain all of them as much as possible. There is a lot of wealth of knowledge on product planning and product development capability in the company, which we would like to harness,” he said.
According to him, the company plans to finance the Sunflame transaction through a mix of internal accruals and debt. According to industry sources, the company is in talks to raise a debt of up to `400 crore to fund the acquisition. “We strongly believe that this acquisition is highly complementary to V-Guard. There are multiple levers for unlocking synergies in areas like geography, product portfolio and trade channels. Further, the recently established, integrated manufacturing facility of Sunflame will enable significant scale up of the overall kitchen portfolio,” Chittilappilly said.
V-Guard is selling the kitchen products only in South India and hardly have any presence outside South India. In that sense, it is extremely complementary as Sunflame has good network in the northern and western markets. V-Guard is traditionally into electrical products and consumer durables, whereas Sunflame is predominantly present in the kitchen channel. Kitchen channel is also different because it also includes vessel stores and all that where V-Guard is currently not present, he added.
Faridabad-based SEPL is one of the leading players in the kitchen appliances space in India. With a history of nearly four decades, SEPL offers a wide product portfolio, including cooktops, chimneys, pressure cooker, mixer grinder and small kitchen appliances that caters to every consumer segment. SEPL recorded a revenue of `349.8 crore in FY22.