Kirloskar Oil Engines Limited (KOEL) announced a strategic move to expand its international footprint, specifically focusing on the Middle East, North Africa (MENA), and Africa regions. KOEL’s wholly-owned subsidiary, Kirloskar International ME FZE (KIME), will acquire 100% equity in Kirloskar Trading SA (PTY) Limited (KTSPL) for approximately INR 8 Crore. This acquisition transitions KOEL’s operations from a distributor-led model to a direct Original Equipment Manufacturer (OEM) presence.
Strategic Investment in African Operations
Kirloskar Oil Engines Limited (KOEL) announced, via a board meeting held on 11th February 2026, approval for a significant strategic investment. The investment is routed through its wholly-owned subsidiary, Kirloskar International ME FZE (KIME), UAE. KIME will invest approximately INR 8 Crore (utilized from an initial capital increase of AED 3.2 million) to acquire 100% equity shares of Kirloskar Trading SA (PTY) Limited (KTSPL).
KTSPL is currently a Promoter Group Company of KOEL. Post-acquisition, KTSPL will become a wholly-owned subsidiary of KIME and a step-down subsidiary of KOEL. The transaction is being carried out on an arm’s length basis.
Rationale for Business Transition
The primary object of this acquisition is to enhance KOEL’s presence in the Africa Region. The move is explicitly designed to transition the company’s regional operations from a distributor-led model to a direct “Original Equipment Manufacturer (OEM)” presence. This transition aims to establish a direct connection with end customers, manage global key accounts, enhance service structures using localized parts-logistics hubs, and improve operational efficiency.
By housing these activities under a direct entity, KOEL expects to drive synergies, facilitate easier expansion into neighboring markets, and ultimately strengthen market leadership.
KTSPL Profile and Financials
KTSPL was incorporated on 29th October 2013 and operates using a Stock and Sale model, primarily serving customers in the Africa Region, including South Africa, Kenya, and Nigeria. KTSPL acts as an authorized agent for identifying customer needs and enabling market-specific product development.
Key turnover data for KTSPL, based on a calendar year financial period ending 31st December, is as follows:
- FY2025 (Provisional): INR 15.5 Crore (ZAR 28,665,305.82)
- FY2024 (Audited): INR 17.6 Crore (ZAR 32,463,931)
- FY2023 (Audited): INR 21.0 Crore (ZAR 38,742,134)
Transaction Details
The acquisition is structured as a Cash Consideration. The indicative time period set for the completion of the acquisition is the 30th June 2026. The total cost involves KIME investing approximately INR 5.5 Crore (subject to closing adjustments) for the purchase of 100% equity shares.
Source: BSE
