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TTK Prestige Readies Rs. 500 Crore War Chest For Acquisition

TTK Prestige is exploring the possibility of making two acquisitions, one in India and the other in the U.S. or Europe, as part of its market expansion strategy for which it has set aside Rs. 500 crore.

The company has decided to foray into B2B markets for products such as fans, water heaters, air-conditioners and other appliances. It is currently in talks with five appliance manufacturers in India and abroad.

TTK Prestige chairman, T.T. Jagannathan told The Hindu that, “We are acquiring, to get into new markets and product segments. For instance, we are not yet in fans, water heaters, air-conditioners or something like that. All these products are classified under B2B, and a very small number of these are sold to homes. There are big guys in this market, we are a home-ware firm and we can’t organically venture into B2B. That’s why we are out to shop.’’

As per Mr. Jagannathan, TTK is targeting a revenue of Rs. 1,000 crore from the B2B space in the next five years. TTK Prestige also has a mandate to hit Rs. 5,000 crore in revenue by 2025.

Commenting on TTK Prestige’s rural drive, he said the company had already roped in 30 NBFCs across India to ensure last-mile reach for its home and kitchen products.

“A year ago, we realised NBFCs were the best route to reach far-flung markets. Now, we have tied up with 30 of them. The idea is to set up godowns at taluk level and ship products from there to self-help groups or directly to customers. NBFCs will work out the financing and collection models,’’ he explained.

TTK Prestige had already sold products worth Rs. 140 crore in fiscal 2018-19 through an NBFC.

However, the collaboration was discontinued once the financing firm merged with a bank.

”Last year, we had a windfall revenue of Rs. 140 crore from rural markets. The NBFC earned 15% of its revenue from selling/financing our products. Our fresh NBFC collaborations have just started working and we are expecting a Rs. 40 crore revenue this year. From next year, rural growth will kick in big time and we will be able to fully remove the base effect and catch up in growth pace,’’ he added.

Innovation continues to be the key thrust area for Mr. Jagannan. The company has been launching 100 new home/kitchen products every year in the last 15 years. It currently has over 14,000 product SKUs.

We try to understand pain points of each customer. As we introduce 100 new products a year, we might drop some of them. For instance, if there is a 40,000 drop in a particular product that we normally sell around 4 lakh units a year, that gives us an indication and we may pull that off the market.’’

TTK Prestige’s 30 member design and innovation team uses SOLIDWORKS’ 3D, CAD & CAM solutions, its own prototyping machines and home tools to design and develop products.

The home-ware brand has recently started using artificial intelligence to read, analyse and understand customer data.

“Unfortunately, we started collecting customer data only in the last five years. But what we so far captured is 10 times more than what we could have collected right from our inception. The basic data reveals the address, age, financial background, the products he brought while data mining gives you better customer insights. It helps us big way in ad too, there’s no need of carpet bombing anymore,’’ responded Mr Jagannathan, who has Master’s in Computer Science from Honolulu University.―The Hindu

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