Bharat Forge inks ₹453.3-crore business transfer deal with Kalyani Strategic Systems – CNBC TV18

Pune-based Bharat Forge on Wednesday (August 6) announced that it entered into a business transfer agreement (BTA) with Kalyani Strategic Systems for a consideration of ₹453.3 crore, according to a stock exchange filing.

On June 30, the global metal forging company had informed that its board approved two key strategic actions — an internal restructuring of its defence business and an upward revision in the acquisition cost of AAM India Manufacturing Corporation Private Limited.

The transaction, aimed at streamlining operations and enhancing focus on defence, will be executed at fair value as determined by an independent valuer.

Kalyani Strategic Systems will issue optionally convertible redeemable preference shares (OCRPs). The restructuring is expected to be completed within 45 days and will not impact Bharat Forge’s consolidated financials.

The company’s board also approved an increase in the acquisition cost of AAM India to a maximum of ₹770 crore, up from the initially estimated ₹544.5 crore. The transaction, announced earlier on October 17, 2024, involves acquiring 100% equity in AAM India, a key supplier of axles for light, medium, and heavy commercial vehicles in India.

Q1 numbers

Separately, the company reported its first quarter results today. Bharat Forge’s standalone revenue declined 10% from last year to ₹2,105 crore, which was marginally lower than the ₹2,173 crore figure projected in the CNBC-TV18 poll. The drop in the company’s standalone revenue was due to a decline in exports.

The company’s management, after the June quarter performance, remarked that the current financial year would be a “challenging period” for the company. The company also remains cautious on the US export business for the remainder of the financial year.

Shares of Bharat Forge closed in red at ₹1,138.8, down as much as 2% on the BSE today (August 6).