Shriram Pistons raises Rs 1,000 crore for Antolin buy

Auto components maker Shriram Pistons and Rings (SPRL) has raised Rs 1,000 crore from a group of mutual fund investors to fund its Rs 1,670-crore acquisition of the local entities of Spanish company Groupo Antolin, people familiar with the fundraising told ET.

The money was raised by issuing two separate sets of non-convertible debentures (NCDs), maturing in 18 months and 24 months, respectively, said the people cited above.

“The 18-month NCDs were raised at 7.30%, while the 24 month NCDs were raised at a rate of 7.35%. These funds were raised to fund the acquisition announced in December. The rest of the money will be arranged by the company via internal accruals,” said a person familiar with the NCD issues.

Axis Bank was the sole arranger for these deals priced earlier this week.

The NCDs were subscribed largely by mutual funds, namely ICICI Prudential, DSP Mutual Fund, Mirae Asset Management and Aditya Birla Mutual Fund, among others. Emails sent to the individual mutual funds, Axis Bank and SPRL remained unanswered until the publication of this report.

Vertical M&A
This acquisition was valued at approximately Rs 1,670 crore and allowed SPRL to expand beyond the traditional powertrain components into the fast-growing automotive interiors segment.
On December 5, SPRL had announced its acquisition of Antolin Lighting India Private Limited (ALIPL), Grupo Antolin India Private Limited (GAIPL), and Grupo Antolin Chakan Private Limited (GACPL), which gave it access to a portfolio of access to modular headliners, sunvisors, door panels, centre floor consoles, pillar trims, etc, the company had said in a release.
Earlier this month, India Ratings and Research (Ind-Ra) upgraded the company’s ratings and proposed non-convertible debentures (NCDs) to ‘IND AA+’ from ‘IND AA’. “Ind-Ra expects the acquisitions to strengthen SPRL’s business profile by increasing its diversification into the engine-agnostic segments.

The company’s current products, including pistons, rings, and valves are engine-components, which are exposed to the risk of EV transition; thus, these acquisitions are likely to help the company in diversifying its revenue base. The acquisitions will also boost the total scale of operations of the consolidated entity,” the rating agency had said.