Hyderabad, October 5

The Board of Directors of Electrosteel Castings Ltd (ECL) and Srikalahasti Pipes Ltd (SPL) has approved the proposed draft Scheme of Amalgamation of the two companies.

Following the merger, the combined entity will become a leading manufacturer of ductile iron pipes with one listed entity. The merged entity will have total DI pipe manufacturing capacity of 8 lakh tonne in India with a market share of 30 per cent.

The draft Scheme of Amalgamation provides for transfer and vesting of the entire undertaking of SPL into the company and the dissolution of SPL without winding up, upon the Scheme of Amalgamation becoming effective. The appointed date for amalgamation under the scheme is October 1.

The merger will be subject to regulatory approvals, including the approval of the shareholders, creditors, SEBI, the stock exchanges where equity shares of the company are listed, Competition Commission of India, the National Company Law Tribunal under the Companies Act, 2013, the Registrar and the official liquidator.

Srikalahasti shareholders will receive 59 equity shares of ECL for every 10 equity shares held in SPL. Both the company boards considered and approved plans to reorganise the businesses with a view to simplify the group structure and consolidate.

Ashutosh Agarwal, Executive Director (Group Finance) and CFO of ECL, said, “The merger will achieve the group objective of consolidating its DI Pipe Manufacturing Business into a single entity, thereby creating a platform that will help in pursuing aggressive growth going forward domestically as well as internationally.”

While Electrosteel Castings Ltd closed last fiscal with revenues of ₹2,480 core, Srikalahasti Pipes Ltd had revenues of ₹1,663 crore.

Srikalahasti Pipes Ltd, which was promoted by the diversified Lanco Group, was taken over by the Kolkata-based ESL group in 2001. After the acquisition, the new management of Srikalahasti has significantly expanded capacity for pig iron and metallurgical coke and also diversified into several new products.

Electrosteel Castings has been a leading manufacturer of ductile iron pipes with nearly five decades of association with water infrastructure solutions for water supply and sewerage systems and supply of pipes.

Electrosteel was trading at ₹25.15, up 3 per cent, and Srikalahasti Pipes was down 5.68 per cent at ₹153.50 on the BSE after the merger announcement.