Rane (Madras) Limited (RML) has entered into an agreement
with Hindustan Composites Limited (HCL) to acquire its Friction Business as a
going concern on a slump sale basis for an enterprise value of Rs 370 crore,
equivalent to Rs 3.70 billion, subject to the terms of the agreement.
HCL’s Friction Business is a leading supplier of friction
materials, with over six decades of experience across the automotive, railway,
farm tractor and industrial sectors. Its product portfolio includes brake
linings, brake pads, brake blocks, clutch facings and industrial friction
products, supported by in-house R&D and a pan-India distribution network.
The business operates two manufacturing facilities in
Paithan and Bhandara, Maharashtra. Based on the latest audited financial
results, the Friction Business reported revenue of Rs 315.04 crore, equivalent
to Rs 3.15 billion, and PBT of Rs 40.29 crore, equivalent to Rs 402.90 million,
in FY26.
As part of the acquisition, RML will also acquire the
“COMPO” brand, strengthening Rane’s leadership position by expanding its reach
across segments, distributors, fleet operators and aftermarket channels.
RML has an established leadership position in the friction
business across passenger vehicles, two-wheelers, aftermarket and railways,
along with an export business aggregating revenue of over Rs 700 crore,
equivalent to Rs 7 billion. This transaction marks a transformative milestone.
Upon completion, the acquisition will create a Rs 1,000 crore-plus, equivalent
to Rs 10 billion-plus, friction materials business, establishing RML as the
market leader across all major segments.
The transaction is expected to unlock substantial
operational synergies through manufacturing scale, an expanded distribution
network and enhanced R&D capabilities. The expanded footprint is expected
to serve as a critical launchpad for future business expansion.
Harish Lakshman,
Chairman, Rane Group, said, “This acquisition leverages Rane’s ability to
create a market-leading friction solutions platform. By integrating these
complementary businesses, we are uniquely positioned to address the evolving
needs of India’s transportation needs while driving operational excellence and
long-term value for our stakeholders.”
The transaction, executed through a Business Transfer
Agreement, remains subject to customary regulatory approvals and closing
conditions. It is expected to be completed by the end of the second quarter.