Bharat Forge Invests $40M in BFAL for Aluminum Automotive Components Expansion

On June 18, 2024, Bharat Forge invested $40 million in its wholly-owned subsidiary, Bharat Forge America Inc. (BFA). BFA will use this investment to further invest in its own subsidiary, Bharat Forge Aluminum USA Inc. (BFAL).

Bharat Forge America Inc.’s (BFA) investment in BFAL is a related party transaction and will be conducted on an arm’s length basis. Mr Amit Kalyani and Mr S. E. Tandale serve as directors in both BFA and BFAL, while Mr B. P. Kalyani is a director in BFAL. Apart from these directors, none of the company’s promoters, promoter groups, or group companies are interested in this investment.

Purpose and Impact of Investment

Bharat Forge Aluminum USA, Inc. is involved in the aluminium automotive components business. The company’s investment in Bharat Forge America Inc. (BFA) and subsequently in BFAL aims to support BFAL’s capital expenditure for its aluminium forging facility, which aligns with BFAL’s primary line of business.

Acquisition Details

The investment will be made in cash and is expected to be completed by June 21, 2024. The company will invest USD 40 million (approximately ₹334.04 crore) as Additional Paid-in Capital.

Shareholding

Through Bharat Forge America Inc. (BFA), Bharat Forge Limited will maintain 100% ownership of BFAL.

About Bharat Forge Aluminum USA, Inc. (BFAL)

Bharat Forge Aluminum USA, Inc. was established in North Carolina, USA, on September 27, 2019. It operates as a wholly-owned subsidiary of Bharat Forge America Inc. and, consequently, is a wholly-owned step-down subsidiary of Bharat Forge Limited. BFAL specialises in manufacturing and supplying aluminium automotive components exclusively for the automotive industry, with no operations in any other country.

About Bharat Forge

Bharat Forge manufactures and sells forged and machined components for the automotive and industrial sectors. Bharat Forge is India’s largest manufacturer and automotive component exporter, catering to domestic and global markets. The company is also a significant supplier of aviation components, maintaining a prominent position in the industry.

On June 19, 2024, the share price of Bharat Forge Ltd. opened at ₹1,720.00, touching the day’s high of ₹ 1,733.40 as of 09:33 AM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.