Piramal Finance Ltd, a subsidiary of Piramal Enterprises, today announced investment of Rs 565 crore across two transactions and said it is expanding its investment focus into the auto component space.
Piramal Finance has financed two companies - RSB Group and Indoshell Mould Ltd - to the extent of Rs 275 crore and Rs 290 crore, respectively.
The investments were made through the Corporate Finance Group (CFG), erstwhile Structured Finance Group, an arm of Piramal Finance, a company statement said here.
Piramal Enterprises is a diversified company with a presence in pharmaceuticals, healthcare insights & analytics and financial services.
Piramal Finance said it has expanded its investment focus to include the auto component space. RSB manufactures auto engineering products such as propeller shafts, gears, axles & machined products for engine components and construction equipment aggregates.
It has strong domestic presence with 11 manufacturing facilities spread across major auto clusters and caters to all the major OEMs in the commercial vehicles, passenger cars, construction and farm equipment.
Indo Shell is a two-wheeler focused precision cast supplier and has a well-diversified customer base.
"The auto component space has been on our radar as a focus area for a while now. As is standard practise across our platform, we committed to an in depth study of the sector over the past few quarters which, has culminated in announcing these first two transactions," said Piramal Finance Managing Director Khushru Jijina.
"The industry has grown at a 15 per cent CAGR over the last decade, which is significantly higher than the OEMs themselves. Both RSB and Indoshell have long-standing relationships with major OEMs and command higher wallet share of their respective customer set.
"We look forward to more such transactions as we scale up our investment focus towards this sector," he said.
RK Behera, Chairman and Managing Director, RSB Group, said, "The investment has provided us with a long-term solution to our capital requirements. Going forward, we believe the auto component demand would be fuelled by stable government framework and increasing economic activity."
"This tranche of funding from the Piramal Group has helped us solve a cash flow mismatch situation and enabled us to meet the incremental demand from two wheeler OEMs.
"In addition, we are now well placed to cater to our export clients in the commercial vehicle segment through our new state-of-the-art export oriented facility situated near Coimbatore," said Indo Shell Mould Managing Director Balaji Jagadeesan.
CFG has diversified over time both in terms of sector and offerings. The company is now sector agnostic and offers capital across the risk curve, including senior debt, acquisition finance, promoter finance, private equity exits alongside its previous focus on mezzanine investments, the statement added.
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