Aurangabad-based Akar Tools plans to acquire a Pune-based forging automotive parts-manufacturer for Rs 40-crore, which would help the company scale-up its forging capacity and enter new markets.

“We are planning to acquire a Pune-based forging automotive parts maker for Rs 40-crore, which will help us increase our forging capacity and customer portfolio as well as reach new markets such as Europe,” Akar Tools’ Managing Director, Mr Sunil Todi, told PTI here.

“The acquisition will be funded through a mix of internal accruals and debt and we expect it will happen within two months,” he said.

Akar Tools is a leading manufacturer of forgings, leaf springs and parabolic leaf springs for the automobile sector and provides components to a host of companies such as Bajaj Auto, Piaggio Vehicles, Mahindra & Mahindra, Maruti Enterprises and Shreenath Agencies.

The company has lined-up a capex of Rs 150-crore for expanding capacity, of which Rs 100-crore will be for increasing its forging capacity to 20,000 tonnes per year from the present 8,000 tonnes per year.

A further Rs 50-crore has been earmarked for expanding the capacity of its alloy steel plant to 22,000 tonnes from the present 15,000 tonnes per month, he said.

The group is working towards merging Akar Tools and parent company RL Steels, he said, adding “we are still not clear if Akar will be merged into RL Steels or vice-versa, but we expect the merger will happen in the next two years.”

Akar is eyeing a revenue of Rs 200-crore in FY 12 as against the Rs 140-crore last year while RL Steels, expects to clock Rs 700-crore this fiscal as against Rs 600-crore in FY 11.

Related Topics