Automotive components manufacturer increases stake in aerospace subsidiary through convertible debentures, aiming to support growth following CIM Tools' recent Airbus Tier-1 supplier certification.
22 Mar 2025 | 11970 Views | By Sarthak Mahajan
Automotive components manufacturer Samvardhana Motherson International Limited announced today a ₹200 crore investment in its aerospace subsidiary, CIM Tools Private Limited, signaling a deeper push into the aviation manufacturing sector.
The company's Board of Directors approved the subscription of up to 20,000 Compulsory Convertible Debentures (CCDs) carrying a 9.25% ...
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Automotive components manufacturer Samvardhana Motherson International Limited announced today a ₹200 crore investment in its aerospace subsidiary, CIM Tools Private Limited, signaling a deeper push into the aviation manufacturing sector.
The company's Board of Directors approved the subscription of up to 20,000 Compulsory Convertible Debentures (CCDs) carrying a 9.25% interest rate, according to regulatory filings with the BSE and National Stock Exchange of India.
"This investment will strengthen CIM Tools' balance sheet and position it to capitalize on emerging opportunities in the aerospace sector," a company representative said in the filing.
Samvardhana Motherson, which acquired a 55% stake in Bengaluru-based CIM Tools in April 2022, plans to execute the investment in one or more tranches during the current quarter, with conversion into equity shares expected by Q1 FY 2025-26. Post-conversion, the parent company's stake is projected to increase to between 68% and 74%.
The investment comes at a strategic time for CIM Tools, which recently achieved Tier-1 supplier status for Airbus commercial aircraft. The aerospace manufacturer operates two facilities in Bengaluru and is currently developing two additional plants in Tumakuru, Karnataka.
Financial results show CIM Tools has doubled its performance since acquisition, with consolidated turnover growing from ₹164.2 crore in FY22 to ₹330.8 crore in FY24.
The transaction, classified as a related-party deal due to existing ownership, adheres to "arm's length" pricing standards and requires no regulatory approvals, according to the company.
Samvardhana Motherson, primarily known for automotive components, has been strategically diversifying into the aerospace manufacturing sector as India seeks to establish itself as a key player in global aviation supply chains.