In a significant move to strengthen its position in the automotive components sector, Sundaram Finance Holdings (SFHL) announced that its Board of Directors has approved the acquisition of a 24.16% stake in Axles India from the foreign promoter, Dana Global Products.

According to a regulatory filing with the National Stock Exchange of India, SFHL will acquire 6,158,208 equity shares of Rs. 10 each at a price of Rs. 296.65 per share, for a total consideration not exceeding Rs. 1.8 billion (US$ 21.9 million), excluding stamp duty, applicable taxes, and other incidental expenses.

The transaction, which is subject to the execution of definitive agreements and necessary regulatory approvals, is expected to be completed on or before April 30th, 2025.

Following the acquisition, SFHL's shareholding in Axles India will increase substantially from the current 38.82% to 62.98%, making Axles India a subsidiary of SFHL.

S. Kalyanaraman, Secretary & Compliance Officer of SFHL, confirmed the approval in the filing, stating, "The Board of Directors of our Company, at the meeting held today, approved the acquisition of 6,158,208 equity shares of Rs. 10 each, representing 24.16% of the paid-up equity share capital of Axles India."

Established in 1982 as a joint venture with Eaton, Axles India Limited specialises in manufacturing axle housings for the entire range of medium and heavy commercial vehicles.

In 1998, Dana Holding Corporation acquired Eaton's Axles Business, including Axles India's shares.

The company has demonstrated consistent growth in recent years, with its total turnover increasing from Rs. 5.69 billion in 2021-22 to Rs. 7.46 billion in 2022-23, and further to Rs. 8.53 billion in 2023-24.

SFHL confirmed in its disclosure that the proposed transaction with Dana Global Products. is not a related party transaction.

Additionally, the company clarified that Sundaram Finance, the promoter of SFHL, does not hold any shares in Axles India.

This acquisition aligns with SFHL's strategic focus on strengthening its portfolio in the automotive components sector, particularly at a time when the commercial vehicle segment in India continues to exhibit robust growth.

The transaction is expected to generate synergies and enhance SFHL's market presence in the axle housing manufacturing segment, a critical component for medium and heavy commercial vehicles.

Founded in 1954 and headquartered in Chennai, Sundaram Finance is a non-banking financial company (NBFC).

Sundaram Finance Holdings operates as the investment arm of the group and has strategically focused on the automotive components manufacturing sector.

The recent acquisition of an additional stake in Axles India reinforces this strategy of strengthening SFHL's position in the automotive components manufacturing ecosystem, especially in components for commercial vehicles. The company's business philosophy emphasises steady growth rather than rapid expansion, financial prudence, and maintaining high asset quality.