Stove Kraft to enter into Electric Switches & Accessories segment

Stove Kraft, through acquisition of business of SKAVA Electric Private Ltd, will foray into the business of manufacturing low voltage switchgear solutions like electrical switches, sockets, distribution boxes, switch boards, M.C.B, bulb holders, etc.

Stove Kraft will acquire the business and IPR rights from SKAVA Electric Private Ltd on a slump sale basis for total consideration of INR 4 Cr. in cash which is subject to due diligence and regulatory approvals. As part of this acquisition, founder of SKAVA will be appointed as a business head of this segment and will be associated with Stove Kraft for a period of at-least 4 years to ensure smooth transition as well as support future business growth. In addition, Stove Kraft will also absorb the design, operation & manufacturing team from SKAVA Electric Private Ltd to kickstart the production. Further, Stove Kraft also plans to incur additional capex of INRS Cr. over next 3-4 years on moulds and machines to increase the production capacity.

SKAVA currently enjoys a robust distribution network in Southern India and will supplement Stove Kraft's existing distribution network. The combined sales network will comprise of retail network, builder projects through professional channels of interior designers/architects, e-commerce platforms like Amazon, Flipkart, Udaan, JioMart etc. and leading physical channel partner networks like Croma, Future group, DMart, Reliance Group, etc. The Company intends to cover majority of the smart cities of India, as listed under the National Smart Cities Mission by the Department of Ministry of Housing and Urban Affairs.

Commenting on this development, Mr. Rajendra Gandhi, Managing Director said, "This acquisition will act as a natural extension to our existing product offerings of Pigeon LED. SKAVA enjoys a strong brand recall and has a wide distribution network in Tier-I and Tier-II cities of Southern India. SKAVA has developed multiple innovative products in the past and with the support of Stove Kraft will continue to do so in the future as well. With this acquisition, Stove Kraft will cater to the mid-segment Electric Switches & Accessories segment and aims to capture a market share of 3% in the next three fiscal years."

Shares of Stove Kraft Limited was last trading in BSE at Rs. 973.55 as compared to the previous close of Rs. 976.35. The total number of shares traded during the day was 2375 in over 411 trades.

The stock hit an intraday high of Rs. 988.20 and intraday low of 969.25. The net turnover during the day was Rs. 2321473.00.

Source : Equity Bulls

Keywords

StoveKraft INE00IN01015 HouseholdAppliances SKAVAElectric Switchgear ElectricalSwitches Switchboards MCB