Sparc Electrex Ltd has officially announced the termination of its Trademark License Agreement with Hyundai Corporation Holdings Co. Ltd, Korea, under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company had entered into this agreement to use the Hyundai trademark in India, expecting to leverage its global brand reputation to improve product positioning in the Indian market. However, due to several challenges in the power tools industry, the company has decided to end the association with Hyundai Holdings.

The announcement was made through an official regulatory disclosure to the Bombay Stock Exchange (BSE). As per the company, the decision was taken considering the high competition in the power tools market and the substantial investment required to establish the Hyundai brand in India.

Reasons for Termination of the Hyundai Trademark Agreement

Sparc Electrex Ltd signed the Hyundai Trademark License Agreement on June 26, 2023, with Hyundai Corporation Holdings Co. Ltd, Korea. The company aimed to benefit from Hyundai’s global brand recognition to strengthen its presence in the Indian power tools market.

However, on April 2, 2025, the company informed the Bombay Stock Exchange that it would terminate the agreement. The primary reasons cited were:

1. High Market Competition – The power tools market in India is highly competitive, with numerous established brands. Competing with well-funded global brands requires significant financial investment in marketing and brand establishment.

2. High Working Capital Requirements – The cost of maintaining a strong market presence under the Hyundai brand turned out to be higher than anticipated, making the business unsustainable in the long run.

3. Immediate Cease of Hyundai Branding – Following the termination, Sparc Electrex Ltd will no longer use the Hyundai brand name for its products, except for clearing the existing stock.

4. No Major Business Impact Expected – Despite the termination, Sparc Electrex does not anticipate any significant impact on its overall business operations.

Impact of Termination on Sparc Electrex

With the termination of the Hyundai Trademark License Agreement, Sparc Electrex Ltd will:

• Stop using the Hyundai brand name for any new imports or sales in India.

• Continue selling existing stock under the Hyundai branding until inventory is cleared.

• Refocus its business strategy on in-house branding and other market opportunities.

The company has assured that the termination of the agreement will not have any adverse financial impact, as it will continue its operations under its own brand.

Sparc Electrex's Official Statement on Hyundai Agreement Termination

In an official statement, Shobith Ganesh Hegde, Managing Director of Sparc Electrex Ltd, confirmed that the decision was made after thorough business evaluation and market analysis. The company has observed that building a strong brand identity in the power tools segment requires extensive financial resources, which may not align with its current growth strategy.

Sparc Electrex Ltd also assured investors and stakeholders that this move will not impact the company’s financial health. The company remains focused on expanding its market presence with innovative strategies.

Stock Market Reaction and Regulatory Compliance

Following the announcement, the company’s BSE Script Code: 531370 filing has been officially recorded. The disclosure was made under SEBI Regulation 30, ensuring transparency for investors and stakeholders.

As per the SEBI Master Circular dated July 11, 2023, all listed companies are required to disclose significant agreements and changes to investors in a timely manner. Sparc Electrex Ltd has complied with these regulatory requirements, reinforcing its commitment to corporate governance and transparency.

Future Plans for Sparc Electrex Ltd

With the Hyundai brand name being discontinued, Sparc Electrex Ltd is expected to focus on:

• Strengthening its independent brand presence in the Indian power tools market.

• Exploring strategic partnerships with other brands or technology providers.

• Expanding its domestic and international business operations with a sustainable business model.

Conclusion

The termination of the Hyundai Trademark License Agreement marks a strategic shift for Sparc Electrex Ltd. While the company initially expected the Hyundai branding to boost its market positioning, challenges in the power tools industry, high competition, and working capital constraints led to a reassessment. With a renewed focus on independent branding, Sparc Electrex aims to continue its growth trajectory without reliance on external brand affiliations.

This development will be closely monitored by investors, stakeholders, and industry analysts, as Sparc Electrex adapts to a new business strategy in the Indian market.

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