Piramal Finance Ltd, a subsidiary of Piramal Enterprises Ltd, has announced that it has made investments to the tune of Rs 565 crore into two transactions focussing on the automotive component space. The company has financed RSB Group to the extent of Rs 275 crore, and Indo Shell Mould Ltd to the extent of Rs 290 crore. The investments were made through the Corporate Finance Group (CFG), erstwhile Structured Finance Group, of Piramal Finance Ltd, the company noted.
The CFG has diversified over time, both in terms of sector and offerings, now offering capital across the risk curve including senior debt, acquisition finance, promoter finance and private equity exits. It typically targets borrowers who face constraints from traditional channels owing to the current stress in the banking system, the company explained.
RSB manufactures automotive engineering products including propeller shafts, gears, axles and machined products for engine components and construction equipment aggregates. The company has strong domestic presence with 11 manufacturing facilities across major automotive clusters, and caters to all major OEMs in the commercial vehicles, passenger cars, construction and farm equipment space.
Meanwhile, Indo Shell is a two-wheeler focussed precision cast supplier with a well-diversified customer base. It has been consistent in producing high quality engine cylinder blocks at competitive costs and enjoys a healthy order book from marque two-wheeler OEMs, the company said.
Khushru Jijina, Managing Director, Piramal Finance Ltd, said the automotive component space has been on the company’s radar as a focus area for a while now. As standard practise across its platform, the company committed to an in-depth study of the sector over the past few quarters, which has culminated in announcing these first two transactions, he added. Jijina noted that both RSB and Indo Shell have long standing relationships with major OEMs and command higher wallet share of their respective customer set.
The company is pleased to have partnered with an organisation of such repute as being a funder of choice in the market today, noted RK Behera, Chairman and Managing Director, RSB Group. He said this investment has provided RSB Group with a long-term solution to its capital requirements.
Balaji Jagadeesan, Managing Director, Indo Shell Mould, said this funding has helped the company solve a cash flow mismatch situation and also enables it to meet incremental demand from two-wheeler OEMs. In addition, Indo Shell is now well placed to cater to export clients in the commercial vehicle segment through its new export-oriented facility situated near Coimbatore, he added.