Gabriel India shares hit 20% upper circuit; here is why

The stock rallied as the company announced a strategic restructuring to consolidate business operations and drive future growth.

In its press release on June 30, it said that the company's board has approved a composite scheme of arrangement (“Scheme”) involving, inter alia, Gabriel India Limited, Asia Investments Private Limited (“AIPL”), and Anchemco India Private Limited (formerly known as Andasia Private Limited) (“Anchemco”).

"This scheme will result in the vesting of the automotive business undertaking of AIPL, comprising the business of Anchemco (engaged in the manufacturing of brake fluids, radiator coolants, diesel exhaust fluid (DEF)/ad-blue, and PU/PVC-based adhesives) and investments in Dana Anand India Private Limited ('Dana'), Henkel ANAND India Private Limited ('Henkel'), and ANAND CY Myutec Automotive Private Limited ('ACYM') ('Demerged Undertaking') into Gabriel," the press release added.

Gabriel will issue 1,158 equity shares of ₹1 each for every 1,000 equity shares of ₹10 each held in AIPL to the shareholders of AIPL.

The press release added that this scheme will consolidate the business of the demerged undertaking of AIPL in automotive components and products like drive train products including transmissions for EVs, Body in White and NVH products and solutions, brass and steel synchroniser rings, aluminium forgings, brake fluids, radiator coolants and diesel exhaust fluids (DEF) / Ad-Blue for 2W, 3W and 4W vehicles and trucks and PU and PVC-based adhesives into Gabriel.

This inclusion, together with the recently added sunroof business, will transform Gabriel from a mono-product suspension company into a diversified, technology-driven mobility solutions provider, reducing the dependency on a single product line by expansion into new segments, geographies, the aftermarket product range, and the railways product range.

This arrangement will propel Gabriel to position itself as a preferred global OEM partner, enhance its customer base, embrace futuristic cutting-edge technology and strengthen aftermarket presence through a diverse product portfolio. The scheme will accelerate profitable growth with better margins, creating substantial shareholder value through EPS accretion and a higher return on equity.

About Gabriel India

Gabriel India is engaged in ride control products, including shock absorbers, struts, and front forks, serving every major automotive segment – two- and three-wheelers, passenger cars, commercial vehicles, and railways.

Gabriel’s products are manufactured across nine state-of-the-art plants, supported by three satellite facilities, with a cumulative production capacity of 60 million units per year.

About ANAND Group

Established in 1961, the ANAND Group is engaged in manufacturing automotive products and systems. The Group comprises 23 companies, including 8 joint ventures and four technical collaborations.

It has a wide presence across 75-plus locations in India.