Bharat Forge Ltd (BFL), a global leader in metal forging, on Monday announced two major board-approved decisions, one aimed at sharpening its defence business focus, and the other involving a price adjustment in an ongoing acquisition.
In a strategic move to consolidate its defence operations, the company will transfer select assets and obligations related to its defence division to its wholly owned subsidiary, Kalyani Strategic Systems Ltd (KSSL). The asset transfer will take place through an itemised sale at a fair market value assessed by an independent valuer. The restructuring is designed to enhance operational efficiency and allow KSSL to take the lead on defence-related growth and innovation.
As part of the deal, KSSL will issue up to ₹500 crore in Optionally Convertible Redeemable Preference Shares (OCRPs) to Bharat Forge as consideration. The transaction is expected to be wrapped up within 45 days and will not affect Bharat Forge’s consolidated financials. KSSL, which focuses exclusively on defence product development and deployment, posted a turnover of ₹1,247 crore and a net worth of ₹232 crore in FY25. Bharat Forge will continue to hold full ownership of the subsidiary after the restructuring.
Separately, the board also approved an upward revision in the acquisition price of AAM India Manufacturing Corporation Pvt. Ltd. The revised acquisition cost now stands at a maximum of ₹770 crore, compared to the earlier estimated ₹544.5 crore. The increase accounts for stronger-than-expected cash reserves in AAM India as of the anticipated closing date, July 1, 2025.
Bharat Forge had initially announced the acquisition on October 17, 2024. AAM India, a significant player in India’s commercial vehicle supply chain, manufactures axles for light, medium, and heavy commercial vehicles and is expected to strengthen BFL’s footprint in the domestic and global automotive components space.
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