The $2 billion Japanese steel wheel manufacturer Topy Industries has picked up a 26% stake in WIL Car Wheels (WCWL), a wholly-owned subsidiary of Wheels India, part of TVS group. Topy will be investing `90 crore for its 26% stake in WCWL.
WCWL was recently floated by Wheels India as its wholly-owned subsidiary to carry on its entire car steel wheel business. Car steel wheel business contributed Rs 224 crore (or little over 10%) to Wheels India’s total turnover of `2,176 crore for the fiscal ended March 31, 2017.
The entire passenger car steel wheel business carried out at Wheels India’s plants in Padi (Chennai) and Bawal in Haryana was sold to WCWL on a slump sale basis for a consideration of R60 crore. Current capacity of the two plants in Padi and Bawal is estimated at 6.5 million units per annum, the company said.
Srivats Ram, managing director, Wheels India, said: “WCWL will have a share capital base of Rs 5 crore.
Topy will be picking up 26% stake in WCWL and will be investing Rs90 crore.
The new company will have a five member board with three directors from Wheels India, one from Topy Industries and one independent director.”
With this transfer, WCWL will have a leadership position in the passenger car steel wheel segment, catering to all major automobile manufacturers in India as well as to the export segment.
It caters to major automotive players in India such as Maruti Suzuki, Hyundai and Ford and is a leader in this segment with a market share of 43%.
“The strategic partnership will combine the leadership position already established by Wheels India in the passenger car steel wheel segment in India, with the technology skills and global relationships of Topy,” Ram said.
Wheels India has a technical collaboration with Topy for 5 years. WCWL will strengthen its overseas passenger cars business through this partnership.
Topy does not have any other partnership in India and this is their first investment/partnership.
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WCWL is also expected to make further investments. As part of its expansion, WCWL will set up a new greenfield plant in Gujarat. This is likely to come up in 2018 with a capacity of around 1.5 million passenger car steel wheels, Srivats Ram added.