Mumbai: Crompton Greaves, part of the billionaire Gautam Thapar-led Avantha Group, is looking to bridge gaps in technology and markets through acquisitions, a top official said on Thursday.
“We believe in organic as well as inorganic growth. We have made seven acquisitions in the past five years... Latin America and China are the two geographies where we are looking,” managing director Sudhir Trehan told Reuters in an interview.
The power equipment maker and electrical appliances maker may buy companies on the basis of customer reach as well as technological value and would not mind spending even up to $1 billion for a deserving candidate, Trehan a gold-medalist engineer, added.
“There is no fixed size in our mind. We may buy a company from $50 million size up to even $1 billion...(And) funds are not a problem for us, as we are a debt-free company. We can raise them on the strength of our balance sheet whenever required.”
It is looking specifically at technology involved in bulk transmission of electric power called High Voltage Direct Current or HVDC, Trehan who has been with the firm since 1972, said.
In April, the firm bought three businesses of Tata group’s Nelco Ltd for about Rs92 crore, giving it a strength in drives and railway business of the domestic market.
In March, it bought UK-based Power Technology Solutions Ltd for an enterprise value of about £30 million to become a significant player in local electrical engineering market, it had said.
Crompton Greaves, which posted revenue of Rs5,284 crore in FY10, expects to see 15-16% growth in its India operations in FY11 and a 5-7% growth in local currency terms in its oversees operations, Trehan said.
“European markets are picking up. They are growing at 5-7%...I expect them to continue growing.”
Europe contributes 60% of Crompton’s international sales which was at Rs4,000 crore in FY10, while US has 25% share and rest is mainly from Australia and New Zealand.
The firm’s order book stood at Rs6,300 crore as of end-July and sees orders in FY11 growing in India at a firmer pace, he said.
Our orders are “at 2008 levels. Power capex is huge as well, industrial capex is also rising,” he added.
The firm finds itself suitably positioned to compete with foreign firms in the domestic power transmission and distribution markets, such as Korea’s Hyosung , China’s TBEA and Baoding, he said.
Crompton will invest Rs400-450 croreees as a capex for FY11 on scaling up its capacities, improving qualities, and employing better technologies, he said.
Shares in the firm ended 1.11% higher at Rs292.4, in a Mumbai market that closed up 1.08% higher.