Crompton Greaves have submitted binding offers and are in negotiations with the Dhoot’s of Videocon
Crompton Greaves have submitted binding offers and are in negotiations with the Dhoot’s of Videocon

Advent International and Temasek-backed Crompton Greaves and homegrown PE fund Everstone Capital are competing to acquire home appliances brand Kenstar in the final leg of the deal.

Both have submitted binding offers and are in negotiations with the Dhoot’s of Videocon to enter into exclusive talks. While Crompton Greaves has bid at Rs 1,400 crore, Everstone Capital has offered Rs 1,300 crore for the company.

Started in 1995, kitchen and home appliances brand Kenstar is part of the Dhoot family owned Videocon Group. The company sells air conditioners, air coolers, mixer grinders and electric kettles and booked a loss of Rs 26.42 crore on the back of Rs 1,939.50 crore of operating income in the financial year ended March 31, 2015. Kenstar commands a healthy market share in different segments and has a strong dealer network. Investment bank Credit Suisse is advising the Dhoot family on the stake sale.

For Crompton Greaves Consumer that was taken over by private equity funds Advent International and Temasek Holdings in 2015 for Rs 2,000 crore, buying Kenstar would give it a deeper product portfolio that includes home appliances and air conditioners. Crompton Greaves’ current portfolio includes fans, appliances, lighting, pumps, home automation, integrated security systems and wiring accessories. Crompton Greaves’ market share has since gone up from Rs 5,800 crore to Rs 13,518.9 crore as on date.

According to a July 2017 report by Indian Brand Equity Foundation, in 2015, revenue from consumer durables sector in India stood at $9.7 billion, which increased to $12.5 billion in FY16. The consumer durable market is expected to grow at CAGR of 13% from FY05 to FY20 with around two third of the total revenue being generated from urban population and rest is generated from rural population.

 
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