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Kirloskar Ferrous Industries Ltd, a manufacturer of castings and pig iron, has agreed to acquire a majority stake in Indian Seamless Metal Tubes (ISMT) Limited by subscribing to equity shares through preferential allotment.
KFIL will subscribe to shares for an aggregate consideration of ₹476.63 crores at a per-share price of ₹30.95 by the way of preferential allotment. These shares will represent 51.25 percent of the resultant share capital of ISMT. The company has also commenced an open offer for acquiring up to 25.05 per cent of the resultant voting capital of the Target Company.
ISMT is an integrated specialized seamless tube manufacturer in India, producing tubes in the range of 6 to 273 mm diameter. The company has alloy Steel plant in India that produces a wide range of alloy steels from 20 to 225 mm diameter.
R.V.Gumaste, Managing Director, KFIL, said: “We are excited to announce this acquisition, which is subject to necessary approvals, as we enter into the seamless pipes market. This acquisition is further widening our portfolio and diversifying the current product portfolio. We are looking forward to leveraging our existing customer base and adding the customers that ISMT brings along. We believe this acquisition brings us an opportunity to integrate iron ore to seamless tubes at a consolidated level. Ongoing projects along with this acquisition will help us bring cost efficiencies in the value chain. We believe these synergies will put us on an accelerated growth path in coming years.”
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