Business Acquisition
Rane (Madras) to Acquire Hindustan Composites’ Friction Business for ₹370 Crore
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Rane (Madras) Limited has entered into a Business Transfer Agreement (BTA) with Hindustan Composites Limited to acquire its friction business on a slump sale basis for a lump sum consideration of ₹370 crore. The acquisition is aimed at strengthening Rane’s leadership in the friction materials business by expanding manufacturing scale, distribution reach, brand portfolio and R&D capabilities.
PRICE-SENSITIVE TRIGGER
Event: Rane (Madras) entered into a Business Transfer Agreement to acquire the friction business of Hindustan Composites Limited.
Type: Business Acquisition
Impact: Positive
Immediate Effect: The acquisition significantly expands Rane’s friction products business and strengthens its leadership position across automotive and industrial friction solutions.
Key Metrics:
- Acquisition Value: ₹370 crore (cash consideration).
- Transaction Structure: Slump sale on a cash-free, debt-free basis.
- FY26 Overall Turnover (HCL): ₹375.01 crore.
- FY26 Friction Business Revenue: ₹315.04 crore.
- FY25 Friction Business Revenue: ₹284.27 crore.
- FY24 Friction Business Revenue: ₹250.69 crore.
- FY26 Profit Before Tax (Friction Business): ₹40.29 crore.
- Combined Friction Business Size: Expected to exceed ₹1,000 crore in revenue after acquisition.
Highlight:
- The ₹370 crore acquisition is expected to create India’s largest friction materials platform with annual revenue exceeding ₹1,000 crore.
What Happened ?
Rane (Madras) Limited has signed a Business Transfer Agreement with Hindustan Composites Limited to acquire its friction business as a going concern on a slump sale basis. The transaction includes the business’s assets, liabilities, contracts, intellectual property, employees, licences and the “COMPO” brand, subject to customary closing conditions and regulatory approvals.
Key Details
Acquisition Overview:
- Acquisition of Hindustan Composites’ friction business through a Business Transfer Agreement.
- Transaction structured as a slump sale on a cash-free, debt-free basis.
- Purchase consideration of ₹370 crore, payable in cash at closing.
- Expected completion by September 30, 2026, subject to regulatory approvals and customary closing conditions.
Strategic Benefits:
- Creates India’s leading friction materials platform.
- Expands Rane’s manufacturing scale and distribution network.
- Strengthens in-house research and development capabilities.
- Adds the established “COMPO” brand to Rane’s portfolio.
- Enhances presence across OEM, aftermarket, fleet operator and industrial channels.
Business Profile of the Acquired Entity:
- Manufactures fibre-based friction materials.
- Product portfolio includes brake liners, brake pads, brake blocks, clutch facings and industrial friction products.
- Serves automotive, railway, farm tractor and industrial sectors.
- Operates manufacturing facilities at Paithan and Bhandara, Maharashtra.
- Country of operations: India.
Growth Outlook:
- Combined friction business revenue is expected to exceed ₹1,000 crore.
- Acquisition is expected to generate operational synergies through manufacturing efficiencies and expanded distribution.
- The enlarged platform positions Rane as the market leader across passenger vehicles, two-wheelers, railways, aftermarket and export markets.
Note:
- The transaction is not a related-party transaction and remains subject to completion of customary closing conditions and regulatory approvals.
Risk Analysis
Summary:
- While strategically significant, the acquisition remains subject to regulatory approvals, successful business integration and completion of the Business Transfer Agreement conditions.
Key Risks:
- Pending regulatory and statutory approvals.
- Integration of manufacturing operations and employees.
- Realisation of expected operational synergies.
- Execution risk during business transition.
Worst Case:
- Any delay in approvals or integration challenges could postpone transaction completion and defer anticipated operational and financial benefits.
Risk Level: Medium
Company Commentary
- Rane believes the acquisition will establish the company as India’s market leader in friction solutions.
- Management expects significant operational synergies through increased manufacturing scale, wider distribution and enhanced R&D capabilities.
- The acquisition strengthens Rane’s ability to serve evolving transportation and industrial markets.
- Chairman Harish Lakshman stated that integrating the complementary businesses will enhance operational excellence and create long-term value for stakeholders.
Official Exchange Filing: Rane (Madras) Limited
