Minda Industries' consolidated net profit dropped 22.7% to Rs 98.68 crore on a 7.4% increase in net sales to Rs 2,181.38 crore in Q3 December 2021 over Q3 December 2020.
Consolidated profit before tax (PBT) skid 19.5% to Rs 140.99 crore in Q3 FY22 from Rs 175.15 crore in Q3 FY21. The board of Minda Industries (MIL) (a flagship company of UNO Minda Group) approved a further investment of Rs 61.20 crore in Minda Kosei Aluminum Wheels (P) (Minda Kosei) by way of subscribing to rights issue at face value of Rs 10 per share. The existing shareholders and joint venture partner has renounced their rights in favour of MIL enabling the company to increase its stake to 77.35% stake from 70% stake in Minda Kosei.
As per the company's press release, Minda Kosei had significant growth opportunities with increasing penetration of 4W Alloy wheel. During last one year, the company had announced expansion at both plants of Minda Kosei i.e. Bawal and Gujrat plants to enhance its total capacity to 3,30,000 wheels per month from current 2,10,000 wheels per month by FY24.
Further, Minda Industries will invest around Rs 17.49 crore to acquire remaining stake of promoters in four partnership firms namely - Samaria Engineering, SM Auto Industries, YA Auto Industries and Auto components. Minda Industries will increase shareholding to 87.50% stake from 51% stake in YA Auto Industries; 95% stake from 48.90% stake in Auto components and 87.50% stake from nil in both Samaria Engineering and SM Auto Industries.
This is in line with UNO MINDA Group's vision and efforts towards consolidation. The group had initiated consolidation exercise five years back as part of which stakes owned by promoters under UNO Minda group in various entities were transferred toMinda Industries. While all group companies were transferred to Minda Industries in last few years, there were four partnership firms where promoters held some stake along with third party.
The company is consolidating stake in these partnership firm by acquiring remaining stake of promoters effective from 1 January 2022. The move will further simplify the holding structure and improve transparency with significant reduction of related party transactions. This would conclude the company's consolidation exercise with all group companies with all auto components business now have been brought under listed entity, barring the JV with Nabtesco which the Group is planning to exit in near future.
Meanwhile, the board approved and declared an interim dividend at the rate of Rs 0.50 per share i.e. 25% on 28,56,20,441 equity shares for the FY2021-22.
Nirmal K Minda, the CMD of Uno Minda Group, stated, "UNO MINDA Group is focused on consistently enhancing value for its stakeholders. The strengthening of its stake in Minda Kasei and consolidation of partnership firms are steps towards this commitment. Consolidation of group companies/firms over the years has transformed us into a unique cohesive unit with considerable financial strength growing as unified force."
Shares of Minda Industries rallied 3.03% to Rs 1,093.05 on BSE. Minda Industries is a flagship company of UNO MINDA Group, which manufactures automobile components for original equipment manufacturers (OEMs).
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