LED maker Lighting Science to foray into India by September

New Delhi: US-based LED manufacturer Lighting Science Group, a global leader in its business, plans to enter the Indian market by September with an eye to grab 20% share of the market over three years.

The company is in advanced talks with three to four domestic LED manufacturers to float an Indian joint venture (JV), industry sources said. Lighting Science Group will hold a majority stake in the joint venture to be named Lighting Science India. The company plans leveraging existing retail network and manufacturing lines of its Indian partner.

Lighting Science Group managing director (India) Arun Narayan told ET that the current Indian market is estimated at $40 million (about 180 crore) and is likely to grow to $400 million (Rs 1,800 crore) by 2014. The company, managed by $2 billion Pegasus Capital Advisors, has applied for Nasdaq listing.

"Lighting Science India targets 15-20% of the growing market," said Narayan. The Indian LED market is in a nascent stage with a few major players like Philips and Crompton Greaves . In India, LED bulbs are about 4-5 times costlier than incandescent bulbs and compact fluorescent lamps (CFLs). Lighting consumes about 20% of energy and LEDs can bring it down to 4%, said Narayan.

Australia , the United States and European Union have barred use of incandescent lamps. In order to encourage use of the energy efficient bulbs, the government in budget 2011-12 halved excise duty on LED bulbs to 5% while the special counter veiling duty of 4% was abolished.

Lighting Science Group expects to earn the majority of its revenues in India by supplying LEDs to local municipal authorities for street lighting. The company also targets to sell its product to industrial units. Retail sales of LEDs would begin in the next two years, Narayan said. The government has recently asked eight industries, including thermal power projects, fertiliser, cement, and iron & steel manufacturing units, to comply with energy efficiency norms. Units consuming more energy than designated would be penalised. It is expected that the nine sectors would have to invest about 30,000 crore over the next three years to comply with the norms.

Lighting Science Group would initiate talks with state governments, local authorities, real estate developers and industrial units for supply of products. The company has engaged Dixon as its first distributor and would form tie-ups with more regional distributors.