Power blues bode well for inverter firms

CURRENT ATTRACTION: CLSA deal with Luminous Power indicative of rising investors' interest in the sector.

The increasing gap between the demand and supply of power in the country has come as a boon for makers of inverters and batteries that ensure uninterrupted power supply.

Although companies operating in this category are mostly small or medium enterprises (SMEs), the growth potential is so strong that foreign investors have already started pumping money into the sector. Current industry sales of inverters in India is about 2.5 million units and the figure is expected to top 8 million in five years.

CLSA Capital Partners, a private equity arm of France's Credit Agricole has recently agreed to invest $20.3 million in New-Delhi-based Luminous Power Technologies for an undisclosed stake. Luminous, with a turnover of a Rs 300 crore, commands 16 per cent market share in the inverter category in India.

Rakesh Malhotra, managing director, Luminous feels that other than leveraging the high growth potential of the inverter market, foreign investors could use this as an opportunity of moving into a very large market for renewable energy.

Luminous hopes to maintain a growth rate of 120 per cent year on year and increase revenues to Rs 1,000 crore by the end of the current fiscal. "Power electronics and energy storage devices would increasingly service the power sector and this could be seen as another key area of interest for foreign investors, Malhotra added.

Depending on the power situation and lifestyle of people, inverter sales vary in the four regions of India. Maximum sales are garnered in the North and West, followed by the East and the South.

"Consumers want to use more and more appliances even during power outages, and this is driving the growth of larger capacity inverters as well. The range of inverters between 2.5 and 10 kilo volt ampere is becoming increasingly popular with homes, shops, petrol pumps and the small office home office category, Malhotra said.

The growth in organised and unorganised sectors have been good for inverter manufacturers in India. This growth would only be on a rise, feel industry experts and players in this segment stand a chance to become one of the foremost SME sector companies to attract foreign investment.

---

PLUG & PLAY

Current industry sales of inverters in India is about 2.5 million units

Sales are expected to top 8 million in five years

Luminous hopes to maintain a growth rate of 120 per cent and increase revenues to Rs 1,000 crore by the end of current fiscal