Sandhar Technologies Bolsters Die-Casting Portfolio with Sundaram-Clayton Acquisition

Automotive components manufacturer, Sandhar Technologies Ltd, today announced a series of strategic decisions aimed at consolidating its business operations and driving growth. In a major move, the Board approved the acquisition of the High Pressure and Low Pressure Aluminium Die Casting Businesses of Sundaram-Clayton Limited at its Hosur Plant by Sandhar Ascast Private Limited, a wholly owned subsidiary of Sandhar Technologies.

The acquisition will be executed through a slump sale, with further details to be disclosed upon signing of the Business Transfer Agreement (BTA), in compliance with SEBI regulations. This acquisition is expected to strengthen Sandhar’s position in the die-casting segment, enhancing its manufacturing capabilities and market reach.

Additionally, the board approved the slump sale of two of its units—Sandhar Technologies Limited (HR) Unit-IV (Zinc Die Casting) and Sandhar Technologies Limited (KA) Unit-II (Zinc Die Casting)—to Sandhar Ascast Private Limited. These transactions, also structured as slump sales on a going concern basis, aim to consolidate Sandhar’s casting business into a single entity to achieve economies of scale.

The financials for FY 2023-24 reveal that the HR Unit-IV contributed Rs. 77.44 crores (including inter-unit sales) and Rs. 5.30 crores (excluding inter-unit sales) to the company’s revenue, representing 0.20% of the total revenue of Rs. 2,715.67 crores. Similarly, the KA Unit-II recorded revenues of Rs. 80.54 crores (including inter-unit sales) and Rs. 5.96 crores (excluding inter-unit sales), accounting for 0.22% of the total revenue.

The lump sum consideration for these sales will be determined on the closing date as per the BTA and will not be less than the fair market value, ensuring an arm’s-length transaction despite being a related party deal. Subject to regulatory approvals, these transactions are expected to be completed by September 30, 2025, the company said.

The rationale behind these slump sales, as outlined by the company, is to pursue both organic and inorganic growth opportunities while driving operational synergies in manufacturing processes for similar products. The Board emphasized that consolidating the casting business into Sandhar Ascast Private Limited would optimize production and enhance efficiency. Notably, these transactions will not alter the shareholding pattern of Sandhar Technologies, a listed entity, nor do they meet the threshold of an "undertaking" under the Companies Act, 2013, rendering Regulation 37A of SEBI LODR inapplicable.

In another significant decision, the Board approved the divestiture of Sandhar’s entire 50% stake in its joint venture, Jinyoung Sandhar Mechatronics Private Limited. The management has been directed to identify potential buyers and prepare valuations, financial analyses, and definitive agreements for final approval by the Finance and Strategy Committee. Further details will be shared upon signing the Definitive Agreement, in line with SEBI disclosure norms.

Sandhar Technologies Limited, headquartered in Gurugram, India, is a leading automotive components manufacturer established in 1987. Specializing in die-casting, sheet metal components, and locking systems, the company serves major OEMs in the automotive sector.