Sunil Mittal Family Office Exits Haier India Stake Talks

Bharti Airtel Chairman Sunil Mittal’s family office has walked away from discussions with Haier Appliances India over a potential stake purchase, after both sides failed to agree on valuation. The development, first reported by Business Standard, underscores the challenges facing Chinese companies seeking to divest or dilute their holdings in India amid regulatory hurdles, geopolitical sensitivities, and valuation mismatches.

Breakdown of the Stake Sale Talks

The talks centered on the potential acquisition of a 49% stake in Haier Appliances India, the Indian subsidiary of Chinese multinational Haier Group. According to reports, Haier was targeting a ₹17,000 crore (approximately $2 billion) valuation for its Indian arm, pegging the price of the 49% stake at nearly ₹8,379 crore.

However, the bids Haier received fell well short of expectations. Sunil Mittal’s family office reportedly put forward an offer of around ₹5,280 crore ($600 million) — far below Haier’s asking price. With neither side willing to compromise, the discussions ultimately collapsed.

Sources familiar with the negotiations confirmed that the difference in valuation was the primary sticking point. Both the Bharti group and the Haier group have so far declined to comment on the matter.

Why Haier Wanted to Sell a Stake in India

The Chinese parent company has been actively exploring ways to reduce its exposure in India. For several months, Haier has been scouting potential investors, including preliminary talks with Reliance Industries Limited (RIL), India’s largest conglomerate. While no deal has materialized, the efforts highlight Haier’s interest in either finding a strategic partner or pursuing a public listing of its Indian subsidiary.

This move comes amid a broader trend of Chinese firms scaling back in India. Last year, SAIC Motor (the parent company of MG Motor India) agreed to sell a majority stake to the Sajjan Jindal-led group. In May 2023, the Ant Group exited its $246 million investment in Paytm via block trades.

For Haier, reducing its stake in India could also help align its global strategy with local market realities while giving it additional resources to expand operations and capture a larger share of the competitive Indian home appliances market.

India’s Growing Appliance Market

India represents one of the fastest-growing consumer appliance markets worldwide. According to Statista, the household appliances market in India is projected to touch $64.3 billion by 2025, expanding at a 7.3% CAGR through 2030.

Haier entered India in 2004, and while the company has made steady inroads, its market presence remains uneven:

Refrigerators: 14% market share, making it a strong player in this category.
Washing Machines, TVs, and Air Conditioners: Market share remains in the single digits, far behind rivals like LG, Samsung, and Whirlpool.

Despite these challenges, Haier India has demonstrated positive financial momentum in recent years.

Haier India’s Financial Performance

Haier India has turned its business around in recent times:

2023 (CY23): Net profit of ₹155.6 crore on net sales of ₹6,305.5 crore.
2022 (CY22): Net loss of ₹63.5 crore with net sales of ₹5,429 crore.

This sharp turnaround reflects both rising consumer demand in India and the company’s ability to optimize operations, even as competition remains intense.

Parallel Developments: LG Electronics IPO

Interestingly, the Haier stake sale talks coincided with reports that LG Electronics India, another major player in the segment, might scale down its planned IPO size. The Korean electronics giant initially targeted ₹15,000 crore, but sources suggest it may now settle for ₹12,000–13,000 crore due to declining valuations.

LG is expected to sell less than the 15% stake it had originally planned to offer. This trend signals broader valuation concerns in India’s consumer electronics and appliances sector, which may have also influenced Haier’s difficulty in finding a buyer at its desired valuation.

What Lies Ahead for Haier India?

With Sunil Mittal’s family office exiting the talks, Haier now has limited options on the table:

Continue exploring private investors: Although discussions with Reliance Industries and others have not yielded results, Haier may persist in finding an Indian strategic partner.
Consider a public listing: Haier India could go for an IPO, unlocking value and enabling the parent company to divest part of its holdings while gaining additional funds for expansion. No final decision has been taken yet.
Focus on organic growth: Given its recent profitability and revenue growth, Haier could leverage its stronghold in the refrigerator category and push harder to capture higher shares in washing machines, air conditioners, and televisions.

Final Thoughts

The breakdown of talks between Sunil Mittal’s family office and Haier Appliances India highlights the complex intersection of valuations, geopolitics, and market dynamics in India’s booming appliances sector. While Haier’s insistence on a $2 billion valuation clashed with bids closer to $600 million, the company remains financially resilient and well-positioned in at least one key category — refrigerators.

With India’s household appliances market set for rapid expansion, Haier India must now decide whether to pursue another private stake sale, consider a public listing, or double down on expanding its market share. What remains clear is that the Indian market’s potential continues to attract both global giants and domestic conglomerates, ensuring the competition will only intensify in the years ahead.

With inputs from agencies

Image Source: Multiple agencies