Philips To Buy 4% In Punjab Anand Lamps

Philips India (PIL) is acquiring a four per cent stake in Punjab Anand Lamps & Industries (PALI) from the co-promoters Anand & Associates.

PIL has informed the Bombay Stock Exchange (BSE) that it intends to acquire about 3.02 lakh shares of PALI representing about four per cent of the total paid-up capital of Rs 7.48 crore.

However, the price of acquisition has not been revealed by the company sources. The PALI scrip, incidentally, is currently hovering around Rs 60 per share.

PIL had earlier picked up around 25 per cent stake in PALI and with the current acquisition has increased its stake to 29 per cent.

PALI is a joint venture with Philips Electronics NV of Holland, PIL and Anand & Associates engaged in the manufacture of fluorescent tubelights, compact fluorescent lamps and GLS lamps. The Dutch parent holds around 51 per cent of the equity.

Market sources say, with the sale of this stake Anand & Associates may be out of the company.

Earlier Philips had five members on the board, while Anand & Associates had two members on the board, who may now move out after this acquisition.

As part of the consolidation and restructuring of its entire business, PIL last year shifted some of the manufacturing operations of its lighting division to PALI.

PIL moved its vertical tubelight unit (VTL) from the Kalwa factory on the outskirts of Mumbai to PALI's factory located at Mohali near Chandigarh.

PIL, in another exercise, decided to shift the lamp and bulb shells plant from ELMI unit at Calcutta to the new plant at Kota, Rajasthan set up at a cost of Rs 350 crore. The said plant would have state-of-the-art machine called ribbon machine with a plant capacity of 400 million shells per annum.

PIL, in the last one year, has been doing a major restructuring exercise mainly trying to cut costs to improve its profitability. As part of this move, PIL sold out its Salt Lake unit to Videocon.

With substantial inflows coming from the sell-out and the lighting business performing quite well in the previous year, PIL may have decided to increase its investments in the lighting business.

In the current year, Philips has received a number of major lighting projects in the automobile industry for plants of majors like Ford, Honda, Daewoo Motors and Hyundai.

During the last year, PIL launched the eco-friendly and energy-saving compact fluorescent lamps called Ecotone which have received good response from the market.