Bharat Forge completes Rs 746.4 crore acquisition of AAM India Manufacturing, including Rs 189.4 crore cash, amid ongoing business restructuring.
Key Highlights
✅ Strategic Acquisition: Bharat Forge acquires 100% stake in AAM India Manufacturing for Rs 746.4 crore
✅ Cash Utilization: Includes Rs 189.4 crore cash on AAM’s books for future growth investments
✅ Revised Valuation: Final price adjusted from initial Rs 544.5 crore (debt-free basis)
✅ Business Restructuring: Follows recent transfer of defence business to subsidiary Kalyani Strategic Systems
Bharat Forge Expands Manufacturing Footprint with AAM India Buyout
Pune, India – Leading forgings and components manufacturer Bharat Forge Ltd. has completed the acquisition of AAM India Manufacturing in a Rs 746.4 crore deal, marking a strategic expansion in its automotive and industrial components business.
Deal Structure & Financial Implications
- Total acquisition cost: Rs 746.4 crore (including Rs 189.4 crore cash on AAM’s books)
- Revised valuation: Up from initial Rs 544.5 crore (October 2024 estimate on debt-free basis)
- Cash utilization: Bharat Forge plans to deploy AAM’s existing cash reserves for future growth initiatives
Why This Acquisition Matters
- Portfolio Diversification: Strengthens Bharat Forge’s position in precision manufacturing
- Operational Synergies: Enhances capabilities in automotive and industrial components
- Financial Flexibility: Immediate access to Rs 189.4 crore liquidity for expansion
Ongoing Business Restructuring
This acquisition follows Bharat Forge’s recent defence business spin-off into Kalyani Strategic Systems Ltd. (KSSL), a wholly-owned subsidiary.
- KSSL’s FY25 turnover: Rs 1,247 crore (vs. Rs 1,144 crore in FY24)
- Strategic Rationale: Allows focused management of high-growth defence technologies
Industry Impact & Future Outlook
- Automotive & Industrial Growth: AAM acquisition supports Bharat Forge’s expansion in global supply chains
- Defence Focus: KSSL poised to capitalize on India’s rising defence manufacturing sector
- Investor Perspective: Strengthens Bharat Forge’s diversified revenue streams
Conclusion
Bharat Forge’s latest acquisition reinforces its leadership in precision manufacturing while optimizing its business structure for sector-specific growth. With AAM India’s integration and KSSL’s defence focus, the company is well-positioned to capitalize on opportunities in automotive, industrial, and defence sectors.
Next Steps:
- Deployment of AAM’s cash reserves for expansion projects
- Continued scaling of Kalyani Strategic Systems in defence manufacturing
- Enhanced competitiveness in global automotive supply chains
Stay updated for further developments on Bharat Forge’s strategic moves.