The New Delhi-based lighting solution Surya Roshni is looking to make an exit from its 44-year old business.
Buyout funds Warburg Pincus, Advent International-backed Crompton Greave Consumer Electricals, and Bain are among those in the fray to buy a controlling stake in Surya Roshni.
About an year ago, company’s promoters had planned a demerger of the lighting and steel businesses and sell the former. But that process, halted some time ago, has recently been resumed. The formal auction process will be carried by Ambit Capital on behalf of Surya Roshni promoter family.
With an annual turnover of Rs 40 billion and a market share of 13 percent, Surya Roshni is currently the second largest lighting player in India. Steel and lighting are the two major business segments of the company. In FY 17, consumer electric division of Surya has posted a revenue of Rs 13.49 billion with the sale of LED, conventional lights, fans and other appliances while the steel division has generated a revenue of Rs 20.64 billion in the same period. This sums up the current market capitalization of the company to Rs 12.39 billion which ultimately generates good opportunities for global private equity funds to expand their base in India.
According to media reports Warburg, which has been investing in India for the past 20 years, is one of the most aggressive contenders for Surya Roshni. Famed for its mind-boggling returns from Bharti Airtel, Warburg made a near three-times return from its investment in Havells, a competitor to Surya Roshni in the lighting business. Another strong contender in row is Crompton Greaves which has also been making strong bets on India markets and in line to buy controlling stake in the company.
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