Lloyd-Havells India deal receives thumbs down from investors; stocks plunge up to 15%

NEW DELHI: Shares of Lloyd Electric and Engineering slumped over 15 per cent in trade on Monday, while that of Havells India tanked nearly 3 per cent, after the former sold its consumer durable business (CDB) to the latter for an enterprise value of Rs 1,600 crore.

The deal is expected to give Havells India a foothold in the fast growing $15 billion consumer appliances market. But the market gave a thumbs down to the deal.

Following the development, shares of Havells India dropped 2.52 per cent to hit a low of Rs 415.15 on BSE.

Shares of Lloyd Electric and Engineering in fact tanked 15.15 per cent to hit a low of Rs 278.15 on BSE.

Havells has bought the Lloyd brand and the consumer durable business that is engaged in sourcing, assembling, marketing and distribution of consumer durables including air-conditioners, TVs, washing machines and other household appliances.

The proforma revenues of consumer durable arm, Lloyd Consumer for 9 months ended 31 December, 2016 stood at Rs 1,242 crore and EBDITA of Rs 75 crore, the ET reported.

Based on its run rate and past performance, full year revenue is estimated at circa Rs 1,850 crore with proforma EBDITA of Rs 110 crore, the report noted.