Billionaire Sunil Mittal’s family office has formally withdrawn from negotiations to acquire nearly half of Haier Appliances India, marking the collapse of one of the most closely watched cross-border stake-sale discussions in India’s consumer durables sector this year. The move underscores the growing difficulty in bridging valuation expectations between global firms looking to exit or dilute holdings and Indian investors wary of steep pricing and legacy cost structures.
The Talks: A Standoff on Valuation
Haier stake selling talks centered on a proposed 49% stake in the company’s Indian arm. Haier Group, the Chinese parent, sought a valuation of about USD 2 billion (~INR 17,650 crore) for the local subsidiary. Potential bidders, led by Mittal’s family office in partnership with private equity major Warburg Pincus, pegged the business closer to USD 600 million (~INR 5,300 crore) — a nearly threefold mismatch.
Industry insiders note that the divergence wasn’t just about headline valuation. Royalty and brand-usage fees payable to the Chinese parent significantly depressed Haier India’s perceived net worth in the eyes of investors, further eroding deal attractiveness.
“High royalty outflows made the business less lucrative on paper,” said one banker familiar with the discussions. “Even with recent profitability, returns looked thinner than Haier’s expectations.”
Haier India: A Growing but Uneven Business
Haier Appliances entered India in 2004, establishing a niche in the highly competitive white goods market. Its 14% share in the refrigerator segment gives it meaningful scale, but in washing machines, televisions, and air conditioners, it remains a single-digit player compared with Korean rivals LG and Samsung.
Financially, the company has shown recent momentum:
- CY2023 sales: INR 6,305 crore, up from INR 5,429 crore in CY2022
- CY2023 net profit: INR 155 crore, reversing a INR 63 crore loss in the prior year
In 2024, Haier’s revenue reportedly surged further to INR 8,900 crore, a 33% year-on-year rise. The company is targeting INR 11,500 crore sales in 2025, positioning itself as the third-largest appliances player in India.
Why the Deal Fell Apart
Several factors converged to derail the deal:
- Valuation Gap: Haier’s USD 2 billion ask versus USD 600 million offers proved too wide to bridge.
- Royalty Obligations: Investors balked at the ongoing brand-usage and royalty payments owed to the Chinese parent, which constrained earnings potential.
- Market Conditions: With peers like LG India considering trimming IPO size amid weaker valuations, Indian bidders were unwilling to overpay.
This breakdown highlights a recurring challenge in India’s consumer durables M&A: reconciling optimistic global benchmarks with domestic market realities.
IPO on the Horizon?
With private stake-sale efforts faltering, Haier India is now actively considering a public listing. Sources suggest an Haier Appliances IPO could provide a cleaner exit route for the parent company, while also enabling broader participation by Indian investors.
The strategy mirrors that of other Chinese firms reducing India exposure. SAIC Motor sold a majority stake in MG Motor India to Sajjan Jindal’s group last year, while Ant Group fully exited Paytm in May 2025 through block deals.
If Haier pursues the IPO route, it would compete for investor attention with LG Electronics India’s planned offering, now rumored to be downsized to INR 12,000–13,000 crore.
Strategic and Market Implications
- For Mittal: The failed bid underscores his family office’s cautious investment stance, favoring realistic pricing and sustainable returns over aggressive expansion.
- For Haier: Haier Appliances IPO may be the only viable path to unlock value, especially as Indian regulators and investors scrutinize Chinese corporate exposure more closely.
- For the Market: The episode illustrates the cooling enthusiasm for high-priced consumer durable assets in India, even as the domestic appliances market is projected to hit USd 64.3 billion by 2025, growing at a 7.3% CAGR through 2030.
The Bigger Picture
Sunil Mittal’s exit from the talks is not just a failed deal; it reflects a structural shift. Global giants, particularly from China, are under pressure to rethink their India strategies amid regulatory scrutiny, geopolitical strains, and competition from Korean and Indian rivals. Meanwhile, Indian promoters and private equity funds are increasingly setting the terms of engagement, unwilling to pay premiums that ignore local cost realities.
The company’s next move — whether pushing ahead with an IPO or seeking fresh suitors — will be closely tracked, as it may set the tone for how other foreign-owned consumer brands recalibrate their India bets.
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