Tata Group explores options for Voltas home appliance division
Tata Group, the Indian conglomerate that owns businesses ranging from salt to software, is considering selling the home appliance operation of Voltas Ltd., according to people familiar with the matter. The sources, who asked not to be identified because the information is private, said that Tata Group’s management is deliberating the possibility of the sale and hasn’t decided whether to include its local joint venture with Arcelik AS in a deal. Considerations are at an early stage and Tata Group may decide to keep the asset for longer, the people said.
Voltas, founded in 1954, manufactures products including air conditioners and water coolers as well as commercial refrigeration units, according to its website. It has a presence across India, the Middle East, Southeast Asia and Africa. The company also has a joint venture in India with Arcelik and launched a range of home appliances under the brand Voltas Beko in the domestic market.
Voltas faces challenges in scaling up in a competitive market
The sources said that Tata Group foresees difficulties in scaling up the home appliance business in a competitive market, where it faces rivals such as LG Electronics Inc., Samsung Electronics Co. and Whirlpool Corp. Voltas Beko reported revenue of around 96.7 billion rupees ($1.2 billion) in the latest financial year. As of Sept. 30, Voltas Beko had a market share of 3.3% for refrigerators and 5.4% for washing machines in India, its quarterly earnings report shows.
Tata Group, which has been streamlining its sprawling portfolio of businesses under Chairman Natarajan Chandrasekaran, has been looking to sell or merge some of its smaller units to focus on its core sectors such as steel, automobiles, technology and consumer products. The group has also been investing in new ventures such as e-commerce, digital health and renewable energy.
Tata Group declines to comment on the sale
A representative for Tata Group declined to comment on the sale, saying that the group does not comment on market speculation. A representative for Arcelik also declined to comment. Shares in Voltas have risen about 3% in Mumbai this year, giving the company a market value of around $3.3 billion.
The news of Tata Group’s potential sale of Voltas home appliance business was first reported by Bloomberg News on Tuesday, citing sources. Reuters and The Economic Times also confirmed the news with their own sources.
