Pricol Ltd Share Price – NSE  / BSE

Auto Ancillaries, Small Cap

Sundaram Auto Components (SACL), wholly owned subsidiary of TVS Motor Company, is engaged in the business of manufacturing of automotive plastic components for passenger vehicles (two-wheelers, four wheelers) and commercial vehicles. Its turnover was Rs 727 crore in FY24.

With this acquisition, Pricol will see a consolidated topline addition of approximately Rs 730 crore combined with SACL’s healthy financial parameters that are value accretive to Pricol. The debt-free acquisition is being made through an all cash deal for an amount of Rs 215.3 crore and is subject to adjustments, if any, as defined in the business transfer agreement at the time of closing the deal.

Subject to satisfaction of conditions precedent identified under the business transfer agreement to be executed, the acquisition is expected to be completed by 31 January 2025.

Vikram Mohan, managing director of Pricol, said: “I express immense pride in welcoming the talented team at SACL into the Pricol family. With this acquisition, our focus will remain on harnessing the combined potential of Pricol and SACL, to become an integrated solution player, driving innovation, and delivering sustainable growth. SACL’s expertise and value systems perfectly align with our vision and core values which will enable us to meet the demands of our customers. This acquisition is a significant step towards realizing our commitment to a sustainable and transformative growth.”

K Gopala Desikan, Group CFO of TVS Motor Company said, “SACL has played a vital role in the TVS group for many years, establishing a significant presence in the Indian automotive component industry. As market dynamics evolve, and we allocate capital more efficiently in accordance with our strategic plans, we are delighted that Pricol, our trusted long-term supplier partner, is taking over the business. We are confident that they will uphold the same values and ethos, ensuring a smooth transition and continued growth.”

Meanwhile, the company’s board approved the investment in Pricol Precision Products upto an amount of Rs 120 crore in one or more tranches. It also approved to provide corporate guarantee for any loans to be obtained by Pricol Precision Products upto an amount not exceeding Rs 250 crore.

Further, the company’s board approved the proposal for investing upto 26% of equity capital of PQSI Digital, a company which is in the business of Industry 4.0 products, in more than one tranches.

Pricol is manufactures automotive components for motorcycles, scooters, cars, trucks, buses, tractors and Off-road vehicles used in the construction and Industrial segment. Pricol also manufacture sintered components and products for fleet management.

The automotive components manufacturer reported consolidated net profit of Rs 45.07 crore in Q2 FY25, up 35.95% as against Rs 33.15 crore posted in Q2 FY24. Revenue from operations increased 15.53% YoY to Rs 650.07 crore in Q2 FY25.

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Pricol announced the proposed acquisition of Sundaram Auto Components (SACL)'s Injection Moulding business through Pricol Precision Products (a wholly owned subsidiary of Pricol). With this acquisition, Pricol will see a consolidated topline addition of approximately Rs 730 crore combined with SACL's healthy financial parameters that are value accretive to Pricol. The debt-free acquisition is being made through an all cash deal for an amount of Rs 215.3 crore and is subject to adjustments, if any, as defined in the Agreement at the time of closing the deal.

This acquisition underscores Pricol's commitment towards advancing its growth in allied business verticals thereby cementing its leadership in the automotive sector. SACL, part of the TVS Motor Company, established in 1992, is a well-recognized player in the Automotive Component Industry. Renowned for its expertise in innovative polymer solutions and cutting-edge injection moulding capabilities, SACL's six state-of-the-art manufacturing facilities across India embody operational excellence and sustainable practices. Over the years, the company has built a strong customer base, supported by robust talent and well-established manufacturing ecosystem.

This acquisition presents Pricol with an opportunity to scale the injection moulding business into an independent business vertical and leverage SACL's strength combined with Pricol's capabilities, thereby paving a way for growth in this vertical. It also further fortifies the opportunities to expand the customer base and product offerings through effectively integrating the synergies of Pricol and SACL.

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The Board of Pricol at its meeting held on 02 December 2024 has approved the proposal for acquisition of injection moulded plastic component solutions division of Sundaram Auto Components, a wholly owned subsidiary of TVS Motor Company by Pricol Precision Products Private (wholly owned subsidiary of the Company) on a slump sale basis.

The Board has approved investment in Pricol Precision Products upto an amount of Rs. 120 crore in one or more tranches.

Further, the Board has approved to provide Corporate Guarantee for any loans to be obtained by Pricol Precision Products upto an amount not exceeding Rs. 250 crore.

The Board has approved the proposal for investing upto 26% of equity capital of PQSI Digital, a company which is in the business of Industry 4.0 products, in more than one tranches.

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Pricol has received revision in credit rating from India Ratings & Research as under:

Fund based and non-fund based working capital limits (Rs 80 crore) - IND A+; Stable/ IND A1+ (upgraded)

Fund based/ and non-fund based working capital limits (Rs 25 crore) - IND A+; Stable/ IND A1+ (assigned)

Long term loans (Rs 27.72 crore) - Rating Withdrawn

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