Mahindra acquires 66 pc in DGP Hinoday

Mumbai, Nov 25: Utility vehicles major Mahindra and Mahindra Ltd (M&M) has signed an agreement to acquire 66 per cent equity stake in the Pune-based DGP Hinoday Industries Ltd (Hinoday) for an undisclosed sum.

Announcing this, a M&M press release said it shall acquire the shares from the existing shareholders, DG Piramal Group and India Private Equity Fund Mauritius, while Hitachi Metals holds the balance 34 per cent equity stake.

Hinoday, which commenced its operations in 1963, is a market leader in its two business segments such as Casting and Ferrites.

The current capacity of the Hinoday's Casting Division -- which makes products like crankshafts, rear axle, turbo charger, differential gear housings and brackets -- is around 24,000 tonnes per annum. This capacity is in the process of being expanded to 44,000 tpa.

As far as Ferrites goes, Hinoday is the largest and technologically the most advanced manufacturer of hard and soft ferrites in India.

It specializes in auto and other high end niche applications, with a capacity close to 6,000 tpa. It exports over 28 per cent of its total sales.

Commenting on the stake sale, DGP Hinoday Chairman Mr Dilip Piramal said, ''Our team has grown the company from Rs 5 crore to Rs 250 crore in the last 25 years. As I focus on the growth of our flagship company, VIP Industries, it gives me a sense of satisfaction to hand over the reigns to the trusted Mahindra Group, whose focus on Auto components will ensure that DGP Hinoday scales new heights.'' M&M Managing Director and Vice Chairman Mr Anand Mahindra stated, ''The DGP Hinoday acquisition is integral to Systech's strategy of providing a one-stop-shop for sophisticated, high-end engineered products like forgings and castings, leveraging India's intellectual capital and low cost high quality manufacturing strengths.'' ICICI Securities was the Sole Advisor to M&M for the equity sale transaction.

UNI