Craftsman Automation to acquire residual 24% stake in DR Axion India, deal to strengthen firm’s presence in PV segment

Upon completion of the transaction, DRAIPL will be a wholly owned subsidiary of Craftsman, it said.

DRAIPL, which was incorporated in December 2006, manufactures aluminium cylinder heads and cylinder blocks, auto components used in passenger vehicles, through gravity and low-pressure die castings. The company has a single manufacturing facility in Chennai. Its customers include automobile original equipment manufacturers (OEMs) selling passenger vehicles in India. The turnover of the company during the fiscal year 2024 stood at ₹1,246.15 crore.

Craftsman Automation pointed out that the acquisition will help strengthen the company’s presence in the passenger vehicle segment, provide process synergies, access the customer base of DRAIPL, and enter the e-mobility solutions market for passenger vehicles.

The cost of acquisition stands at ₹250 crore and the transaction is expected to be completed by June 30, 2024, it said.

Srinivasan Ravi, Chairman and Managing Director of Craftsman Automation said further to the company’s acquisition of 76% in DRAIPL in February 2023, it is consolidating its shareholding with further acquisition of the residual 24% stake in DRAIPL. “While DR Axion Co, Korea, ceases to be an ultimate shareholder in the DRAIPL, it will continue to provide a technological collaboration for new product and technology development,” he said.

During the fourth quarter of fiscal year 2024, Craftsman Automation reported a 12.74% year-on-year (YoY) rise in its consolidated operating revenue at ₹1,105.34 crore. Net profit for the quarter fell 20% to ₹62.33 crore.

Shares of the company have declined over 18% since the beginning of the year. The stock has gained over 37% in the last one year.