Rakesh Jhunjhunwala may sign MoU in preparation for taking key strategic stake in Syska LED

Billionaire investor Rakesh Jhunjhunwala is set to pick up a significant strategic stake in top lighting solutions firm Syska LED, CNBC TV 18 reported in its August 9 report. According to the report, Jhunjhunwala is likely to sign an MoU to take a stake in the company. This information came after it was reported a few days ago that Syska LED has held talks with Crompton Greaves Consumer Electrical (CG Consumer) and is eyeing an acquisition to strengthen the lighting portfolio.

CNBC TV 18 reported on July 23 that CG Consumer was in an advanced stage of negotiations to buy the Syska LED lighting business. Sources said that talks were going on for the value of the deal at around Rs 2,000 crore.

On March 6, MoneyControl had learned from sources that HDFC Bank had initiated preliminary discussions to evaluate the potential sale of Syska LED to recover the loan.

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A person with knowledge of the matter had said, “The business of Syska LED was hit hard due to the outbreak of COVID-19 and HDFC Bank, as the bank is now trying to find a buyer for the firm due to its debt burden. On the other hand, the firm may also explore raising funds through the private equity route by selling minority stake, though such attempts have been made in the past as well.”

Siska LED, a part of the Pune-based SSK Group, was started in 2012 and its portfolio includes smaller verticals such as accessories, consumer home appliances, wires, cables and personal care products. The company gained immense popularity after a successful TV ad series by late Bollywood actor Irrfan Khan.

In November 2019, there were reports that Syska LED was in talks with private equity firms to sell minority stakes and deliver the firm’s balance sheet.

Over the years, Syska has emerged as a synonym for LED lights in the domestic market. As per industry estimates, the Indian LED lighting market is expected to grow at a CAGR of 24.3 per cent between 2020 and 2025. Apart from Sysca, other leading players in the domestic LED lighting segment include Havells, Bajaj Electricals, Crompton Greaves Consumer, Wipro Lighting and Philips.

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