Havells Shares Surge on Sylvania Stake Sale

Shares of Havells India surged on Thursday after the electrical equipment company announced a stake sale in its European unit Sylvania, which was seen as a drag on its operations. Havells shares rose as much as 10.15 per cent at its day's high of Rs 311.80. Havells announced that its subsidiary Havells Holdings proposes to divest 80 per cent stake in Havells Sylvania Malta BV to Chinese company Shanghai Feilo Acoustics. The transaction is expected to close by February 2016. Analysts have viewed the stake sale positively. Rakesh Arora of Macquarie Capital Securities said Sylvania operations were not profitable for Havells and was diverting management attention. The stock could get re-rated, he added. In 2007, Havells had acquired Frankfurt-headquartered Sylvania for $300 million (nearly Rs 2,000 crore at current exchange rate). Havells India also proposed to divest 80 per cent stake in its wholly owned subsidiary, Havells Exim Limited, Hong Kong. The combined equity value for 100 per cent stake for both companies - Havells Sylvania Malta BV and Havells Exim Limited - is 186 million euros (Rs 1,340 crore), the company said. Havells India shares closed 7.75 per cent higher as compared to 0.93 per cent gain in Nifty.