Castings and pig iron manufacturer, Kirloskar Ferrous Industries, is acquiring a majority stake (51.25%) in Indian Seamless Metal Tubes (ISMT) through a preferential allotment and sole control over ISMT.
Kirloskar Ferrous said that it will subscribe to shares for an aggregate consideration of Rs 476.63 Crores at Rs 30.95 per share by the way of preferential allotment. The company has also commenced an open offer for acquiring up to 25.05% of the resultant voting capital of ISMT.
ISMT is the largest integrated specialised seamless tube manufacturer in India. It manufacturers specialised seamless tubes in the range of 6-273 mm diameter. The company has an alloy steel plant in India that produces a range of alloy steels from 20 to 225 mm diameter.
R V Gumaste, managing director, KFIL, said with this acquisition they would be entering the seamless pipes market and widening their product portfolio. “This acquisition brings us an opportunity to integrate iron ore to seamless tubes at a consolidated level. Ongoing projects along with this acquisition will help us bring cost efficiencies in the value chain. We believe these synergies will put us on an accelerated growth path in coming years,” Gumaste said.