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Kovai-based auto comp firm gets Rs 290 crore from Piramal Finance
The Coimbatore-based IndoShell Mould is one of the two companies that have been financed by Piramal Enterprises, which has expanded its finance focus into the auto component sector.
IndoShell is among the largest shell moulding precision casting manufacturer in India besides being one of the largest global manufacturers of two-wheeler engine cylinder blocks.
The about five-decade-old southern entity got Rs 290 crore from Piramal Enterprises through its subsidiary Piramal Finance, which has also funded the RSG Group company to the tune of Rs 275 crore. The investments were made through the Corporate Finance Group (CFG), erstwhile Structured Finance Group, of Piramal Finance Ltd.
IndoShell, with four machining facilities, including one in the US, services over 55 customers by producing over 200 different active components. It is a two-wheeler focussed precision cast supplier and has a well-diversified customer base. The company has been consistent in producing high quality engine cylinder blocks at competitive costs and consequently enjoys a healthy order book from marque two-wheeler OEMs.
Balaji Jagadeesan, MD, Indo Shell Mould, said “This tranche of funding from the Piramal Group has helped us solve a cash flow mismatch situation and further enables us to meet the incremental demand from two-wheeler OEMs. 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.”
Khushru Jijina, MD, Piramal Finance Limited, said “the auto component space has been on our radar as a focus area for a while now. As is standard practice 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. The industry has grown at a 15 pc 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 further scale up our investment focus towards this sector.”
RSB manufactures auto engineering products such as propeller shafts, gears and 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.
RK Behera, CMD, RSB Group, said “this investment has provided us with a long-term solution to our capital requirements. We believe the auto component demand will be fuelled by stable government framework and increasing economic activity.”