Tata Group, one of India’s largest multinational conglomerates, is reportedly contemplating the divestment of the domestic appliance division of Voltas Ltd. The perceived challenges in scaling the business amidst intense market competition drive this consideration.
Voltas Ltd., established in 1954, boasts a diverse product portfolio that includes air conditioners, water dispensers, and commercial refrigeration appliances. The company has a substantial footprint not only in India but also in the Middle East, Southeast Asia, and Africa.
The potential sale is still in the preliminary discussion phase, and it is unclear whether the local joint venture with Arcelik AS will be part of the transaction. This joint venture, Voltas Beko, has introduced a variety of domestic appliances in the Indian market. As of the end of September, Voltas Beko held a 3.3% market share for refrigerators and a 5.4% share for washing machines in India.
Despite the hurdles, Voltas’ shares have seen a 3% increase in Mumbai this year, resulting in a market valuation of approximately $3.3 billion. Nevertheless, the leadership at Tata Group continues to weigh the feasibility of the sale.
A spokesperson for Tata Group chose not to comment on the situation. It’s worth noting that these considerations are preliminary, and Tata Group may opt to retain the asset for a longer duration.