Schneider Electric in talks to buy stake in Luminous

BANGALORE: French energy major Schneider Electric is in advanced talks to acquire a majority stake in the Delhi-based Luminous Power Technologies, people familiar with the development said. Luminous has revenue of about 1,150 crore and is an important player in the industry.

Luminous founder and chief executive officer Rakesh Malhotra said several strategic partners, including Schneider Electric, have shown interest in a majority stake. "All those discussions are quite preliminary at this stage," he added. A company official said investment banker Kotak has been engaged for such discussions though no official mandate has been given yet.

Schneider Electric India spokesperson Gaurav Sharma said the company would not comment on any ongoing discussions. A source familiar with the talks said Schneider had engaged BNP Paribas for its previous India acquisitions.

CLSA Capital Partners, which has a minority stake in Luminous after pumping in $20 million in 2007, is looking to exit from such a trade sale, a Luminous official said. He added that if the deal with Schneider goes through, the company will be renamed as Schneider Luminous India, with combined revenues worth 5,000-6,000 crore. Rakesh Malhotra is not expected to exit completely and could retain a significant minority stake, people familiar with the transaction said.

They added that Schneider is specifically keen on the battery operations of Luminous Power Technologies though it has substantial presence in UPS solutions as well.

A Schneider Electric India official said the company has aggressive expansion plans for India in the energy efficiency space and could look at companies in the power inverter space. Schneider has been quite aggressive in India after it shortlisted India as one of its top five growth markets last year.

In the past 20 months, the French firm has concluded four acquisitions in the country, the latest being Zicom's security business for 225 crore. Schneider globally did revenues worth $28 billion in 2010 with Asia Pacific revenues at $2 billion.