Although the company refused to give out the financial details of the deal, sources said the 20 per cent stake amounted to nearly Rs 8 crore (Rs 80 million).
After the acquisition DSL will become a wholly owned subsidiary of Daikin Industries and will be renamed Daikin Airconditioning India Pvt Ltd.
According to Daikin, the acquisition was a significant move as India was a priority market for the company. It is also a part of the company's plans to turn its fortunes around and improve its market share and financial performance.
For the Shriram Group, the sale of its stake in DSL is part of an overall plan of exiting the airconditioning business. "The long standing and mutually beneficial relationship between the Shriram and Daikin groups will, however, continue with Usha International (a Siddharth Shriram group company)
Daikin claimed that the first half of the current financial year had been good as the company had posted its best results by cutting costs and increasing its topline growth.
After gaining full control of the company, Daikin now plans to significantly bolster its product line by launching several new models from its parent's international portfolio.
During 2003-04 Daikin recorded a turnover of Rs 150 crore (Rs 1.5 billion) and had a 50 per cent marketshare of the premium-end AC market.
Earlier this year Daikin had also appointed Toshiki Hayashi as its new managing director in India. In India the premium end of the AC market is estimated to be growing at 20 per cent annually compared to the 30 per cent groth witnessed by the middle and entry level models.
