Crompton Greaves Consumer Electricals is likely to offer Rs 1,500 crore to acquire home appliances brand Kenstar as it looks to ramp up its presence in the household durables space. This could make Crompton Greaves Consumer, which is owned by private equity investors Advent International and Temasek, the preferred choice for the promoters of Kenstar.
The Dhoots of Videocon Group have put Kenstar on the block due to pressure from lenders as the diversified enterprise owes Rs 35,000 crore to them. While Crompton has indicated a preliminary bid, it will make a formal offer only after completing due diligence, which is currently under way. Crompton is valuing Kenstar at around 20 times its operating profit of Rs 75 crore, sources familiar with the matter said.
A source close to the Videocon Group said that no deal has been finalised. When contacted, Crompton Greaves Electricals declined to comment on the story. In May this year, TOI reported that Crompton and Tata group company Voltas were in the fray, while recent media reports said Orient Electric, Symphony and Havells, too, have shown interest for the home-grown brand. Swiss bank Credit Suisse is handling the sale of Kenstar on behalf of Videocon Group.
Kenstar is one of the brands besides Videocon that has been developed and powerfully built by the Dhoot family, who otherwise is known to introduce foreign consumer electronic brands like Akai, National, Panasonic and Samsung in India through equity partnerships. Launched in October 1996, Kenstar has a presence in cooling appliances, food processors, water heaters and cooking appliances. Endorsed by Bollywood star Shah Rukh Khan, Kenstar commands a high market share in certain categories like air coolers.
