According to the chief executive of ABB India, the local branch of the Swedish-Swiss industrial giant ABB, the company intends to continue making bolt-on acquisitions where it makes sense, but it also seeks to boost up its manufacturing capabilities in the nation.
The company does not have any outstanding debt, and it has a healthy cash balance of over 3,600 crore. It intends to use half of that cash balance to make bolt-on acquisitions in order to strengthen its position in the world’s fifth-largest economy. A bolt-on acquisition is a sort of merger and acquisition in which a firm purchases another company that is engaged in the same line of work with the intention of merging it with either the parent company or one of its current units. Acquisitions of this type are carried out when the target company has either made a significant technological advance or possesses niche strengths. According to ABB’s MD Sanjeev Sharma, the firm is looking into bolt-on acquisitions in sectors where the company can provide extra value to its clients. ABB has a market value of more than Rs 71,600 crore. Sharma mentioned in his response that the target profile also includes startup companies.
The company, which has been doing business in India since 1949, also has plans to increase its capital spending in order to increase its production capacities in the country. It does this in the hopes of capitalising on the business opportunities that will be created as a result of the government’s emphasis on the expansion of infrastructure through the FY24 Budget. It currently operates 27 production facilities across the country and plans to establish some additional units in order to speed up its revenue growth.
Although the company already has a significant amount of land adjacent to its facilities in India, some of these new facilities will be constructed on the same premises as some of the units that it now operates. A gas-insulated switchgear (GIS) facility was recently opened by ABB in the city of Nashik in the Indian state of Maharashtra. Sharma predicted that the new location would more than double their GIS capability.
In addition to meeting the demands of the Indian market, ABB’s facilities in India have also been providing services to customers in other countries. More than eighty percent of the company’s revenue is generated in India, with the remaining twenty percent coming from overseas markets. The electrical equipment manufacturer, who has annual sales of more than 10,000 crore rupees, stated that the domestic market has been rising at a quicker rate, despite the fact that the export market has been growing.