Belrise Industries is set to merge Badve Autocomps Private Limited and Eximius Infra Tech Solutions Private Limited to simplify its group structure and enhance growth. The merger aims to reduce related party transactions by ₹11,511.38m and improve operational efficiencies. It will also increase content per vehicle and customer stickiness. The transaction is expected to be immediately EPS accretive.
Strategic Merger Overview
Belrise Industries is pursuing a strategic merger with Badve Autocomps Pvt. Ltd. (BAPL) and Eximius Infra Tech Solution Pvt. Ltd. (EITSPL). This initiative is designed to streamline the group structure and unlock significant operational synergies.
Key Benefits of the Merger
The merger is projected to yield several key benefits:
- Streamlined group structure, reducing related party transactions (RPT) by ₹11,511.38m.
- Increased content per vehicle through engineered plastic components and Tier-0.5 system assemblies.
- Improved operational efficiencies across manufacturing and supply chain due to higher verticalization.
- Enhanced customer stickiness by increasing wallet share among existing customers.
- Immediate EPS accretion, executed at close to book value.
Financial Highlights
The combined financials for FY25 are as follows:
- BAPL Revenue: INR 14,211m and PAT: INR 793m
- EITSPL Revenue: INR 6,956m and PAT: INR 330m
The post-merger addition of revenue is expected to be around INR ~10,000m (Net of RPT). The timeline for completion is approximately 10-12 months, contingent upon regulatory approvals.
Operational Synergies
The merger will deepen Belrise Industries’ presence in the two-wheeler segment and increase verticalization, leading to larger economies of scale. Belrise aims to transition from a Tier-1 supplier to a Tier-0.5 supplier (system supplier).
Merger Valuation and Swap Ratio
The merger valuation reflects a Belrise P/E Ratio of approximately 30.9x and a combined BAPL & EITSPL P/E ratio of around 8.3x. The swap ratio is structured as follows:
- 140 shares of Belrise for every 1 share of BAPL.
- 10 shares of Belrise for every 135 shares of EITSPL.
Source: BSE
