Surya Roshni’s Lighting Business Being Eyed by Top Equity Acquirers

India: The country’s second largest light maker, Surya Roshni is demerging into a standalone unit. The four-decade old company controlled by Jaiprakash Aggarwal family, is also the largest manufacturer of galvanized pipes but wants to separate it from the faster growing lighting business.

This trend, of Global equity player taking interest in the Indian consumer electrical companies, saw a rise after Advent International and Temask Holding acquired Crompton Greaves Consumer electricals last year. The long-term risk investors are confident about this sector’s growth as the government is seen pushing for smart cities and new townships, which can be accounted on the fact that India is one of the fastest growing economies and the urbanization rate is sky rocketing. The company’s consumer business – which is predominantly LED and conventional lighting, registered a double figured growth rate in the last fiscal year, with the product sales jumping twofold during FY16.

According to TechSci Research, the business acquisition in this sector is a mindful move as the lighting market is set to grow in the coming future. India, being one of the fastest emerging economies, has a huge scope for the consumer electricals market, as plans for smart cities and people switching to LED lights for reducing electricity consumption would increase the market in the coming years.

According to a recent report published by TechSci Research, “India LED Lighting Market By Type, By Application, By End Use Sector, Competition Forecast and Opportunities, 2011 – 2021”, LED lighting market in India is projected to register a CAGR of over 30% during 2016-2021, due to increasingly affordable prices of LED lights coupled with implementation of LED bulbs distribution scheme by the government of India at subsidized rates. Demand for LED lights in India is predominantly concentrated in the South and North regions due to high population density, increasing urbanization, rising number of government initiatives that encourage use of LED lights, etc. In 2015, LED lighting market in India was dominated by LED bulbs and lamps, followed by LED batten lights; and this trend is forecast to continue through 2021. Philips, Surya Roshni, Havells, Syska LED and Osram are few of the leading players in India LED lighting market. Outdoor lighting applications, which includes street lights, lights in parks, traffic lights, garage lights, parking lots, and other public places, accounted for a majority revenue share in India LED lighting market in 2015.