Pune-based Bharat Forge Limited, on Monday, announced that its step-down subsidiary ‘JS Auto’ has entered into a business transfer agreement with Indo Shell Mould Ltd. (ISML) for acquiring their special economic zone (SEZ) Unit in Tamil Nadu’s SIPCOT, Erode.

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Price of the acquisition is undisclosed.

The said SEZ unit supplies fully machined critical castings to marquee customers in the automotive industry. Post the acquisition, the SEZ unit will act as the third manufacturing unit of JS Auto. The acquisition will take JS Auto's total capacity from the current 42,000 MTPA to 1,42,000 MTPA.

Bharat Forge believes that this acquisition will strengthen JS Auto’s presence in the casting sector and expand its product offering & client base. It will also enhance JS Auto’s footprint in the domestic manufacturing landscape. The acquisition will be EPS accretive from the first year itself.

The closing of the transaction is subject to customary conditions and regulatory approvals.

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Bharat Forge Chairman & Managing Director Baba Kalyani recently said that the railways is a huge play for India's private sector, adding that tenders are moving on the fast track.

Jefferies issued an ‘underperform’ rating on the Bharat Forge stock with a price target of Rs 555 per share.

Shares of Bharat Forge are trading 0.4 percent higher at Rs 884.30.

First Published:Jan 2, 2023 1:37 PM IST