Tube Investments of India (TII) has announced that it has entered into a share subscription cum shareholders agreement to acquire a 67% stake in Kcaltech System India (KCAL India) for approximately Rs 62 crore.
KCAL India, a subsidiary of South Korea's KC Altech Co (KCAL Korea), specialized in the manufacturing of aluminum tubes and components used in heating, ventilation, and air conditioning (HVAC) systems within the automotive sector. For the financial year 2023-24, the company reported an audited turnover of Rs 80 crore.This strategic acquisition will allow TII to enhance its presence in the expanding automotive sector, particularly in aluminum tube production for HVAC applications. The investment will also help KCAL India scale up its manufacturing capabilities to support its growth plans.
The company is set to acquire a 67% stake in Kcaltech System India (KCAL India) for a consideration of Rs 62 crore. As part of the transaction, the firm will subscribe to 2,24,08,313 equity shares, which will represent 67% of KCAL India's equity share capital.
The acquisition is expected to be completed on or before by 31 January 2025, subject to satisfactory completion of the conditions precedent as contained in the share subscription and shareholders agreement executed between the parties.
Mukesh Ahuja, Managing Director of TII, stated, Through this acquisition and the planned expansion of KCAL India, we are entering the growing automobile HVAC ecosystem. This move will enable us to tap into the expanding market for aluminium components used in automobile HVAC systems, aligning our capabilities with the increasing demand for these solutions in India.
Andrew Choi, president, KCAL Korea said, Our collaboration with TII will provide new opportunities to KCAL India and foster mutual growth. KCAL India would immensely benefit from the industry expertise and customer relationships of TII in the automobile segment. With our experience and TII's backing, together we aim to capture the growing demand for indigenously made aluminium tubes.
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Tube Investments of India, a Murugappa Group company, is one of India's leading manufacturers of a wide range of precision engineered and metal formed products for major industries such as automotive, railway, construction, mining, agriculture, etc. The company is also a leading manufacturer of bicycles in India, with a range of iconic brands and a strong market presence.
The company reported 18.63% fall in consolidated net profit to Rs 299.77 crore despite a 14.37% increase in total income from operations to Rs 4,924.55 crore in Q2 FY25 over Q2 FY24.
The scrip slipped 1.59% to Rs 3,380.45 on the BSE.
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