Havell's lines up Rs 100 cr for two units

NEW DELHI: Electrical switches and power equipment manufacturer, Havell’s India, has rolled out yet another round of diversification initiative. While the company is investing close to Rs 100 crore in two new manufacturing facilities, it is also eyeing a series of acquisitions, both in India and overseas.

As a move to expand its basket of products, Havell’s is entering two new industry segments, electrical motors and power capacitors. This will mark its entry into the Rs 1,800 crore market it wasn’t present in earlier.

Even as it scouts for land in Rajasthan to set up a power motor plant at a cost of Rs 80 crore, it has started work on a Rs 20 crore power capacitors manufacturing unit at its Haridwar complex. The two projects would be funded out of Havell’s internal accruals, Anil Gupta, Jt MD, Havell’s India told ET.

Initially, Havell’s plans to restrict itself to manufacturing power motors up to 100 HP and gradually move to 300 HP in due course. This will put the company in direct competition with the likes of ABB, Crompton Greaves and Siemens in the Rs 1,500 crore market for power motors.

Havell’s power capacitor unit in Haridwar will have an initial capacity of 3,00,000 KVRs, which will be ramped up further. The company estimates it would generate Rs 36 crore in revenues from capacitors and Rs 240 crore from motor business, in the first year itself.

Besides, the company has also mandated its investment banker to look for acquisition opportunities. “Domestically we would be interested in an acquisition which can give us a product range in the electrical space.

Overseas, we would look at a acquisition target that could get us a brand and distribution,” Mr Gupta said. While he refused to share more details, he did confirm to be in talks with a company each in Australia and Europe respectively.

Recently, Havell announced its acquisition of Geyer, a German electrical company and Havell's former JV partner, at a price of Euro 10 mn. The acquisition is expected to complete sometime next month.

Last year, it made a Pound 90 mn bid to acquire electrical switch major, Crabtree's UK business, but lost out to Siemens. The Rs 1,000-crore switchgear and eletricals company sees the global venture as an important element in its growth agenda. It hopes to log $ 22 mn revenues from exports this year.

Havell intenisfied its diversification during the last three years when it moved into the consumer space with the launch of its domestic products including, fans, luminaries & fixtures and CFLs.