Kirloskar Ferrous Industries (KFIL), an Indian castings and pig iron manufacturer, has signed a deal worth INR 476.63 crores to acquire a majority stake of 51.25% in Indian Seamless Metal Tubes (ISMT), an integrated specialized seamless tube manufacturer based in Maharashtra.

The stake will be bought by subscription to Indian Seamless Metal Tubes’ equity shares via preferential allotment and sole control. It will be contingent on obtaining the approvals of the members of Kirloskar Ferrous Industries and Indian Seamless Metal Tubes alongside the required statutory and regulatory approvals.

Kirloskar Ferrous Industries will subscribe to the shares at a price of INR 30.95 per share. Furthermore, the castings and pig iron manufacturer has also launched an open offer for acquiring up to 25.05% of the resultant voting capital of Indian Seamless Metal Tubes.

The board of directors of Kirloskar Ferrous Industries has also sanctioned seeking approval of the members of the company for raising the allowed borrowing limits.

RV Gumaste — Managing Director of Kirloskar Ferrous Industries 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.”

  India, Indian Seamless Metal Tubes, ISMT, Kirloskar Ferrous Industries, Maharashtra, RV Gumaste