Leading electrical goods maker Havells India today said it will acquire 51 per cent stake in Promptec Renewable Energy Solutions for about Rs 33 crore to enter the solar energy and LED street lighting segment.
"The Board of Havells India Limited today approved the acquisition of majority stake of 51 per cent in Promptec Renewable Energy Solutions at an enterprise value of Rs 65 crore," the company said.
The acquisition will allow Havells to enter the solar energy sector and expand its base further into LED segment, the company said in a statement.
Moreover, it would provide Havells a manufacturing base in the Southern region, which the company needs to expand its footprint in the region.
"We would invest around Rs 12 crore to upgrade Promptec's manufacturing unit at Bangalore. It would help us both way as it would provide them technology and categories which were missing out by Havells," Havells Executive Vice President Rajiv Goel told PTI.
He added that the deal was a "perfect synergy" between Havells and Promptec as it would help it expand into areas such as LED (light-emitting diode) based street lighting and solar products as lanterns and chargers.
"It will provide us a platform in some LED-based products as street lighting in which the company is aiming to expand. It would also help us start in solar category," Goel added.
Havells is also aiming to expand Promptec business to Rs 250 crore in next 3-4 years from its current revenues of Rs 35 crore.
On being asked as how the multifold growth would be achieved, he said: "Promptec's technology would be benefited with our large marketing network. The Solar market is huge and has vast opportunities."
Commenting on the development, Havells India Chairman and Managing Director Anil Rai Gupta said: "The alliance also marks the entry of Havells into the promising field of solar energy that could further be expanded, considering the number of renewable energy initiatives of the government."
According to Goel, the deal is collaborative and the promoters of Promptec will hold 49 per cent stake in the company post the deal.
Promptec sells a range of solar products as solar lanterns, solar charging stations, solar street lighting which has large untapped demand in rural areas as well export markets. It had recently executed projects to supply solar cellphone stations to Africa markets through Digicell.
