2 min read.Updated: 13 Mar 2019, 05:55 AM ISTM. Sriram
The acquisition will help Mahindra CIE foray into aluminium die casting space and strengthen presence in two-wheeler market
The deal is among several struck in India's auto components industry in a private equity-driven consolidation wave
Mumbai:Mahindra CIE Automotive Ltd has acquired Aurangabad Electricals Ltd for ₹830 crore, marking its entry into the aluminium die-casting industry. The acquisition will also strengthen its presence in the two-wheeler market, said the company in a regulatory filing on Tuesday. The transaction is expected to be completed by 10 April.
Aluminium die-casting is used to make smooth, defined metal parts by forcing molten metal under high pressure into a mould.
Aurangabad Electricals, founded in 1985, has five manufacturing facilities located across Aurangabad, Pune and Pantnagar in Maharashtra. It produces a range of body, brake and engine parts and supplies them to local and international two-wheeler and passenger vehicle companies and Tier-I auto component makers.
Aurangabad Electricals recorded revenues of ₹565 crore, ₹569 crore and ₹651 crore during fiscal years 2015-16, 2016-I7 and 2017-18, respectively.
It reported a profit of ₹34.4 crore in FY18.
Mahindra CIE made its last major acquisition in 2016 when it purchased automotive forging company Bill Forge for ₹1,332 crore in a cash and stock deal with the aim of diversifying its business and increasing revenue and profit from Asian markets.
Spain’s CIE Automotive SA is an industrial group specializing in supplying components and sub-assemblies to automobile as well as Tier-I auto part makers in India, Europe and Mexico. It is listed on the stock exchanges in Madrid and Bilbao.
Last year CIE picked up an additional 5% stake for ₹483 crore (around $70 million). The Spanish firm now holds 56.32% in the listed Indian entity. Mahindra Group has a 11.44% stake in Mahindra CIE. The stake is held through M&M’s unit, Mahindra Vehicle Manufacturers Ltd.
For the year ended 31 December 2018, Mahindra CIE reported a net profit of ₹35 crore on revenue of ₹2,529 crore.
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