M&M acquires DGP Hinoday
Mahindra and Mahindra (M&M) today announced acquisition of DGP Hinoday Industries, a joint venture between DG Piramal Group and India Private Equity Fund Mauritius and Hitachi Metals, for undisclosed amount.
M&M will acquire 66 per cent stake in Hinoday from DG Piramal Group and India Private Equity Fund Mauritius. Hitachi Metals will hold the balance 34 per cent stake. ICICI Securities was the advisor to M&M for the transaction.
Hinoday is a market leader in its two business segments namely casting and ferrites. It is the largest, and technologically the most advanced manufacturer of hard and soft ferrites in India, with sales of Rs 250 crore.
It specializes in auto and other high end niche applications, with a capacity close to 6,000 tonne per annum. Hinoday exports over 28 per cent of its total sales.
The acquisition of the majority stake marks the entry of M&M into the sophisticated SG Iron casting space. M&M will leverage DGP Hinoday’s expertise in SG Iron as a platform to help grow into one of the leading casting players in the country.
M&M also sees strong growth potential in the ferrites segment. The high quality management team of Hinoday will continue to lead the company and M&M looks forward to integrating them into the systech (systems and technologies sector) strategy.
The SG Iron Casting Division is renowned manufacturer of cast products like crankshafts, rear axle, turbo charger, differential gear housings and brackets. The current capacity of the Casting Division is around 24,000 tonnes per annum, that is currently in the process of being expanded to 44,000 tpa.
Dilip Piramal, Chairman, DGP Hinoday said “ As I focus on the growth of our flagship company, VIP Industries, it gives me a sense of satisfaction to hand over the reigns to the trusted Mahindra Group, whose focus on auto components will ensure that DGP Hinoday scales new heights.”
Anand Mahindra, Managing Director and Vice Chairman, Mahindra & Mahindra stated, “The DGP Hinoday acquisition is integral to Systech’s strategy of providing sophisticated, high-end engineered products.” Hemant Luthra, President, Systems and Technologies Sector (Systech) said, “Hinoday fits well with the Mahindra group’s plans to establish itself as a world class supplier of foundry products. We also see strong world wide demand for ferrites where DGP Hinoday has developed competitive technology. As Systech reaches out to its customers, it strives to offer a combination of engineering services coupled with a global footprint of high quality manufacturing in the area of automotive components”.
