Hillhouse-backed Versuni, formerly Philips Domestic Appliances, picks Kotak and Citi for $300-350 million India arm IPO

The firm sells its products (kitchen appliances, ironing products, air purifiers, CCTV cameras and vacuum cleaners) under the brands Philips and Preethi.

Asia-focused private equity major Hillhouse Investment backed Versuni (formerly Philips Domestic Appliances) has picked advisors for a proposed IPO of the latter's India arm, adding to the growing list of MNC units looking to unlock value in the domestic markets, multiple industry sources in the know told Moneycontrol.

"Kotak Mahindra Capital and Citi have been engaged for the Versuni India deal for now and more banks may be added later if required," said one of the persons above.

The firm sells its products (kitchen appliances, ironing products, air purifiers, CCTV cameras and vacuum cleaners) under the brands Philips and Preethi.

A second person said that though no final call had been taken yet on the structure or size, the plan is to raise between $300 mn to $350 mn.

A third person confirmed the above.

All the three persons above spoke on the condition of anonymity.

An email query has been sent to Hillhouse Investment followed by reminders and Moneycontrol is awaiting an official response. An immediate comment could not be elicited from Versuni. This article will be updated as soon as we hear from both the firms.

When contacted, Kotak Mahindra Capital and Citi declined to comment.

In March 2021, Amsterdam based Royal Philips, a global leader in health technology, announced that it has signed an agreement to sell its Domestic Appliances business, a major player in kitchen, coffee, garment care and home care appliances, to Hillhouse Investment. The transaction valued the domestic appliances business at an enterprise value of approximately $4.37 billion.

Later, in February 2023, Philips Domestic Appliances announced a change in its company name to Versuni.

"As a licensee of Royal Philips, the company will continue to use the Philips consumer brand, as well as Saeco, Gaggia and Philips Walita, on its products and services. Consumers can also continue to use products of its other brands: Preethi, L’OR Barista and Senseo," the announcement added.

Versuni India has two manufacturing facilities based in Chennai and Ahmedabad, along with an R&D centre in the former. It is aiming to manufacture 90 per cent of its portfolio domestically, up from 70 per cent currently, in the next two years, Gulbahar Taurani, MD and CEO, Versuni India, told Financial Express in March.

The India MNC IPO and M&A wave

On October 21, Hyundai Motor India , the Indian arm of the South Korean auto major, made its market debut with a $3.3-billion issue, India's biggest ever IPO. Italian auto parts maker Carraro's Indian arm made its public market debut in December. Other MNC IPO's in the works include those by the Indian arms of Norway's Orkla (parent owns MTR & Eastern Condiments and it has filed draft papers) and Apollo Global backed auto parts player Tenneco.

Alluding to the attractiveness of the Indian capital markets, in an exclusive interview to Moneycontrol dated June 25, Kim-Thu Posnett, global co-head of investment banking at Goldman Sachs said, "Today, India stands out as one of the most active equity capital markets globally. We are seeing a clear pick-up in conversations with global investors who are increasingly focused on India listings, attracted by the opportunity to chase growth and diversify their portfolios through a wide range of deal structures made possible through strong liquidity in the Indian markets. "

She added, "We are also seeing growing interest from global corporate clients exploring listing their India businesses or choosing India as a listing venue, particularly where the cost base or meaningful revenues are being driven out of India."

Also Read - India becoming a core pillar of our growth strategy: Goldman Sachs’ Kim-Thu Posnett

Incidentally, there are two high-profile deals brewing in the Indian consumer electronics and home appliances segment.

Also Read - Sunil Mittal and Warburg Pincus enter into exclusive talks for Haier India stake buy; announcement likely this month

On June 6, Moneycontrol was the first to report that a consortium including Bharti Enterprises Founder and Chairman Sunil Mittal and US private equity major Warburg Pincus had entered into exclusive negotiations with Chinese consumer appliances giant Haier Smart Home Co to pick up a substantial stake in its India arm.

The plan is for the incoming Mittal-Warburg Pincus combine to pick up a 49 percent stake with the Chinese parent expected to also hold 49 percent stake. The balance 2 percent stake will be with the employees and both parties, the parent and the consortium, will exercise joint control going ahead, keeping board seats and other aspects in mind, the report had added.

Also Read - Sunil Mittal and Warburg Pincus enter into exclusive talks for Haier India stake buy; announcement likely this month

Earlier, on April 21, Moneycontrol also reported that US global home appliances major Whirlpool Corporation had roped in Goldman Sachs as the sell-side advisor for the former's part stake sale in listed Indian subsidiary Whirlpool of India, in a bid to fast-track growth.

Global funds like Advent International, KKR, Bain and TPG may show early interest in the deal and participation by overseas strategics could not be ruled out, the report elaborated.

Also Read - Whirlpool Corporation ropes in Goldman Sachs for part stake sale process in Indian arm