V-Guard Industries, the Kerala-based manufacturer and marketer of electrical and electronic products, said it is planning its first overseas acquisition in the medium to large industrial uninterrupted power supply manufacturing space.
The company is in advanced stages of negotiations with a UPS manufacturer each in Europe and China and the deal may come through within a few months, said Mithun Chittilappalli, executive director, V-Guard.
"We are looking at acquiring technology and expertise in high-end UPS manufacturing through these buyouts than creating a big market outside India," he said.
At present, the company manufactures only online UPS, targeted at domestic users of computers and electronic gadgets, which contribute only 5-6 per cent to its around Rs 300-crore (Rs 3-billion) turnover.
The industrial UPS market in India, growing at a minimum 10-15 per cent per annum, is currently valued about Rs 1,500 crore (Rs 15 billion).
The scene is dominated by a few players such as Neumeric Power Systems, APC, Emerson and Microtech.
He added that the company was negotiating to buy the industrial UPS subsidiary of a power solutions player in Europe with about Euro100-120 million turnover.
V-Guard
may look at forming a joint venture company with that player if the acquisition attempt fails. The company will rely mainly on internal accruals and debt from Indian banks to fund the acquisitions, Chittilappalli said.
He said V-Guard, which manufactures power stabilisers, cables, water pumps, heaters and water treatment units, was likely to have a turnover of close to Rs 400 crore (Rs 4 billion) during the current year.
The company is close to commission a new cable manufacturing unit at Coimbatore in Tamil Nadu and another building wire cable unit at Kashipur in Uttarkhand, which will take off by December. V-Guard had raised about Rs 65 crore (Rs 650 million) in February through an initial public offer to fund the expansions.
The Coimbatore unit will make about 3,000 tonnes per annum of aluminium and copper wire cables.
The Rs 22-crore (Rs 220-million) facility is close to the existing unit, which makes electrical cables. The Kashipur has an investment of Rs 24 crore (Rs 240 million).
The Rs 8,000-crore (Rs 80 billion) electrical industry is highly unorganised. V-Guard targets to garner a business of Rs 120-Rs 150 crore (Rs 1.2 to Rs 1.5 billion) from this business within a few years.