Engineering Company Enters Into Share Purchase Agreement for Acquisition of 100 Per Cent Equity Stake in Karna Intertech Pvt Ltd
The shares of the company have a PE of 18x, an ROE of 25 per cent and an ROCE of 28 per cent.
Shriram Pistons & Rings Ltd (SPRL) entered into a Share Purchase Agreement to fully acquire Karna Intertech Private Limited (Karna), obtaining a 100 per cent equity stake. This acquisition, finalized on April 01, 2025, results in Karna becoming a wholly owned subsidiary of SPRL. Karna, established on December 11, 1981, operates a sophisticated tool room in Bahadurgarh, Haryana, and manufactures die casting moulds. Karna’s authorized share capital is R 1,20,00,000, with a paid-up share capital of Rs 15,00,000. The company’s revenue for the fiscal year 2023-24 was Rs 49.98 million, for 2022-23 was Rs 46.02 million and for 2021-22 was Rs 37.78 million.
The acquisition, completed for a cash consideration of INR 50 million, is aimed at securing Karna's crucial role as a supplier of gravity die casting moulds to SPRL. This strategic move allows SPRL to leverage synergies and meet future plant requirements, as Karna's skilled workforce produces high-precision moulds based on SPRL's confidential designs. The acquisition does not involve any related party transactions or require governmental or regulatory approvals. Karna's manufacturing range aligns with SPRL's piston casting production, making it a beneficial long-term investment.
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Shriram Pistons & Rings Ltd reigns supreme in crafting essential engine components like pistons, pins, rings, and valves, catering to both domestic and international auto giants. Their extensive arsenal boasts a wide range of these critical parts, ensuring engines purr smoothly across the globe.
The company has a market cap of over Rs 8,000 crore. The company reported amazing numbers in its Quarterly Results and nine-month results. An ace investor, Sunil Singhania, through its fund, i.e., Abakkus Diversified Fund, owns a 1.17 per cent stake. Also, Life Insurance Corporation of India owns a 1.57 per cent stake in the company. The shares of the company have a PE of 18x, an ROE of 25 per cent and an ROCE of 28 per cent. The stock gave multibagger returns of over 400 per cent in 3 years.
Disclaimer: The article is for informational purposes only and not investment advice.