The automotive components investment firm will increase its ownership to nearly 63% in the axle housing manufacturer, making Axles India its subsidiary in a deal expected to close by end of April.
10 Apr 2025 | 2541 Views | By Angitha Suresh
In a significant move to strengthen its position in the automotive components sector, Sundaram Finance Holdings Limited (SFHL) announced today that its Board of Directors has approved the acquisition of a 24.16% stake in Axles India Limited from foreign promoter Dana Global Products Inc.
According to the regulatory filing ...
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In a significant move to strengthen its position in the automotive components sector, Sundaram Finance Holdings Limited (SFHL) announced today that its Board of Directors has approved the acquisition of a 24.16% stake in Axles India Limited from foreign promoter Dana Global Products Inc.
According to the regulatory filing with the National Stock Exchange of India, SFHL will acquire 61,58,208 equity shares of ₹10 each at a price of ₹296.65 per share, for a total consideration not exceeding ₹182.68 crore, excluding stamp duty, applicable taxes, and other incidental expenses.
The transaction, which is subject to execution of definitive agreements and necessary regulatory approvals, is expected to be completed on or before April 30, 2025. Post-acquisition, SFHL's shareholding in Axles India will increase substantially from the current 38.82% to 62.98%, making Axles India a subsidiary of SFHL.
"The Board of Directors of our Company, at the meeting held today, approved the acquisition of 61,58,208 equity shares of Rs.10/- each representing 24.16% in the paid-up equity share capital of Axles India Limited," said S. Kalyanaraman, Secretary & Compliance Officer of SFHL, in the filing.
Axles India Limited, which was established in 1982 as a joint venture with Eaton, specializes in manufacturing axle housings for the entire range of medium and heavy commercial vehicles. In 1998, Dana Holding Corporation purchased Eaton's Axles Business, which included Axles India's shares.
The company has shown consistent growth over the past three years with total turnover increasing from ₹569.56 crore in 2021-22 to ₹746.35 crore in 2022-23, and further to ₹853.88 crore in 2023-24.
SFHL confirmed in its disclosure that the proposed transaction with Dana Global Products Inc. is not a related party transaction. Additionally, the company stated that Sundaram Finance Limited, the promoter of SFHL, does not hold any shares in Axles India Limited.
The acquisition aligns with SFHL's strategic focus on strengthening its portfolio in the automotive components sector, particularly at a time when the commercial vehicle segment in India continues to show robust growth.
The transaction is expected to create synergies and enhance SFHL's market presence in the axle housing manufacturing segment, which is a critical component for medium and heavy commercial vehicles.
Sundaram Finance is a non-banking financial companies (NBFCs), founded in 1954 and headquartered in Chennai. Sundaram Finance Holdings Limited specifically operates as the investment arm of the group and has strategically focused on the automotive components manufacturing sector. The recent acquisition of additional stake in Axles India aligns with this strategy of strengthening its position in the auto component manufacturing ecosystem, particularly in components for commercial vehicles.
The company's business philosophy emphasizes steady growth rather than rapid expansion, financial prudence, and maintaining high asset quality.