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Ramkrishna Forgings Ltd. on Wednesday announced the acquisition of up to 51 percent voting rights of electric vehicle start-up TSUYO Manufacturing Pvt. Ltd. in a phased manner.

The acquisition of the voting rights will be done in multiple tranches, according to the company.

The company plans to invest around Rs 100 crore in TSUYO over the next 5 years, which is expected to generate a turnover of around Rs 500 crore by the end of the fifth year.

TSUYO, a Make-In-India start-up company, manufactures powertrain solutions for electric vehicles. This proposed investment by Ramkrishna Forgings, which is one of the leading suppliers of rolled, forged and machined products, will help TSUYO expand its product portfolio and expand its facilities for the manufacturing of motors, controllers, E-axles, and differentials.

In turn, Ramkrishna Forgings will be able to leverage the association with TSUYO to grow in the electric vehicle space in India.

This is a securities subscription agreement with the company's promoters and its shareholders.

The company has agreed to subscribe to the equity shares and the optionally convertible debentures (OCDs) in multiple tranches, upon completion of several conditions precedents and pre-closing covenants by TSUYO and TSUYO promoters.

The company also highlighted that the shareholders’ agreement provides for listing of equity shares of TSUYO as an exit option for the shareholders.

Also Read: Ramkrishna Forgings climbs nearly 2% after winning third order in nearly two months

The acquisition of the first tranche of securities of TSUYO is expected to be completed prior to the March quarter of the current financial year.

Ramkrishna Forgings' Whole-time Director and CFO Lalit Khetan believes that the strategic investment will improve their capability and also expand the company's market share in the EV segment. "This transaction also brings numerous synergies that solidify our position as one of the top provider of forging solutions," he said.

Shares of Ramkrishna Forgings are trading 1.8 percent higher at Rs 261.40.

Also Read: Ramkrishna Forgings expects electric vehicles business to account for 3-4% of total sales in FY23