Videocon Industries chairman Venugopal Dhoot has taken full control of Hyundai Electronics by raising his stake in the company to 100 per cent from around 70 per cent now. He has bought the 30 per cent stake from Hyundai Korea.
Dhoot confirmed the development to Business Standard but refused to divulge further details on the deal. According to market estimates, Dhoot has paid close to Rs 50 crore (Rs 500 million) to Hyundai Korea for acquiring the stake.
Videocon will keep the rights to market some of its televisions, LCDs, DVDs, refrigerators, microwave ovens and digital cameras under the Hyundai brand name.
In return, the company will pay Hyundai a certain per cent as royalty on sales. The development will help Videocon consolidate its position as a major player in the consumer electronics segment in the country, analysts said.
Videocon has recently announced its acquisition of the Electrolux consumer electronics business in the country and Thomson's colour picture tube business.
Sources said Videocon had well laid out plans to make Hyundai an accepted brand in the consumer durables segment in India. It is already a well known brand in the auto segment.
Hyundai Electronics India will invest Rs 100 crore (Rs 1 billion) in setting up a manufacturing facility in Uttaranchal. The capacity at the proposed plant would be 1.2 million units for CTVs, 0.3 million for DVD players, and 0.2 million units for air conditioners.
"Hyundai Electronics is aggressively planning to expand its dealership network in the country. So far, the company has a network of 2,000 dealers in the country. This will be expanded to 3,500 by September 2005," said Subir Palit, chief operating officer, Hyundai Electronics India Ltd.
Hyundai Electronics was established last year. According to Palit, in less than a year of the company's presence in the country, Hyundai has been able to capture a market share of 4 per cent in the colour TV market and 8 per cent in the flat television market.
"Till March 2005, Hyundai was able to garner sales of Rs 100 crore. We expect that the sales revenue will rise to Rs 500 crore (Rs 5 billion) by March 2006," said Palit.
