New Delhi, Aug. 7 -- India Resurgence Fund (IndiaRF), an India-focussed investment platform promoted by Piramal Finance Limited and Bain Capital, has acquired a majority stake in a machine castings and precision engineering company.
This transaction is among the largest private equity investments in this segment of the engineering industry.
IndiaRF has acquired an over 60% stake in Fine Edge Engineering for Rs 2,000 crore (around $210 million), according to industry sources.
Fine Edge Engineering houses the iron casting and machining business of the Belagavi-headquartered Ashok Iron Works group.
Founded in 1974, the Ashok Iron Works Group is a manufacturer of machined iron castings, and it operates an integrated casting and machining platform. The company operates four foundries with a capacity to process 1,44,000 million tonnes per annum and seven machine shops capable of producing 600,000 parts annually.
The company manufactures engine blocks, engine heads and transmission housing weighing between 20 kg to 5,000 kg. Its products serve diversified end markets, including supplying for industrial engines, farm equipment and automotive applications.
The company claims it has developed relationships with global and domestic original equipment manufacturers, and that it is a single-source supplier across several large-engine-block categories.
Investec acted as an exclusive sell-side advisor to the Ashok Iron Works Group and its shareholders.
"We will support the business through investments in capacity expansion, R&D, new product development and operational excellence, while building on its long-standing customer relationships," Shantanu Nalavadi, managing director of IndiaRF said in the note.
"The company is also well positioned to benefit from growing demand for high-horsepower engine applications, particularly as the global data centre build-out accelerates," Nalavadi added.
IndiaRF, currently investing from its second fund, largely invests in control situations. The firm intends to invest in businesses with fundamentally strong growth prospects including in themes linked to consumption, infrastructure and domestic manufacturing.
The firm's limited partner(LP) base includes global marquee institutional investors, and prominent international and domestic family offices.
Earlier, IndiaRF's second fund invested in specialty chemicals manufacturer Anthea Aromatics. The first fund has invested on entities such as Livasa and Setco Automotive.
Published by HT Digital Content Services with permission from VC Circle.