RR Kabel, in a virtual media conference a short while ago, announced that it would be acquiring the fans and lighting business of Luminous – a brand owned by Schneider Electric.
Shreegopal Kabra, Managing Director, RR Global, said that this would be a reversal of trend of multinational companies acquiring local brands.
Responding to a question posed by T&D India, Kabra confirmed that the acquisition will not involve the UPS and inverter business of Luminous.
Discussing the rationale, Kabra noted that this acquisition fits into the strategy of RR Kabel to make inroads in its newly-launched FMEG (fast moving electrical goods) business. In FY22, RR Kabel recorded a turnover of close to Rs.300 crore in the FMEG business. Likewise, the lighting and fans business of Luminous is also of comparable size.
As both Luminous and RR Kabel are unlisted companies, they have chosen not to disclose the value of the business deal.
Kabra noted that the acquisition has benefited both the parties. On its part Schneider Electric is a global brand and wanted all its products to be available in the global market. However, lights and fans did not fit very well into the business plans of Luminous. RR Kabel, in turn, will benefit from the market penetration of Luminous products.
Shreegopal Kabra said that it wanted to scale up its FMEG products through the launch of newer products, but it would not venture into consumer appliances (refrigerators, air-conditioners, etc).
Also, RR Kabel, largely known for its “hehind-the-wall” wires & cables, would get more visibility through the fans and lighting range.
Brand retention
Kabra noted that the “Luminous” brand will be retained for a period of four years or so. After that the “Luminous” brand will be phased out as RR Kabel’s own brand gets developed.
Switchgear business
RR Kabel is also planning to soon enter the switchgear business. It will do in the second quarter (July to September) of FY22 with the launch of miniature circuit breakers (MCB). The product is ready and has received required BIS certification. The marketing strategy is currently being finalized, Kabra noted.
In the next phase, RR Kabel will move to launching other switchgear products like ELCB, RCCB, etc. The company has earmarked Rs.150 crore of investment in the switchgear business, over the next 3-4 years.
Also read: RR Kabel’s “Wire Ka Fire Test” Receives Encouraging Response
Capex
RR Kabel has planned capital expenditure of Rs.1,000 crore to be made across its various business, in the next 3-4 years. This includes Rs.600 crore in the wires & cables business, around Rs.250 crore in the lighting business and some Rs.150 crore in the aforementioned switchgear business.
