Shares of Bharat Forge Ltd fell 2.75% on 7th August after touching a day’s high of Rs 1,128, despite the company announcing a business transfer agreement (BTA) with Kalyani Strategic Systems for a consideration of Rs 453.3 crore, according to a stock exchange filing.

On 30th June, Bharat Forge announced that its board had approved two major strategic decisions. These include restructuring its defence business and increasing the acquisition cost for AAM India Manufacturing Corporation Private Limited.

The restructuring aims to streamline operations and sharpen the company’s focus on defence. The transaction will be executed at fair value, determined by an independent valuer. Kalyani Strategic Systems will issue optionally convertible, redeemable preference shares (OCRPs) optionally. The process is expected to be completed within 45 days. Furthermore, it will not impact Bharat Forge’s consolidated financials.

Additionally, the board approved an upward revision in the acquisition cost of AAM India, raising it to a maximum of Rs 770 crore from the earlier estimate of Rs 544.5 crore. The deal, first announced on 17th October 2024, involves acquiring 100% equity in AAM India. They are a major supplier of axles for commercial vehicles across various segments in India.

Q1 Results

Bharat Forge also reported its Q1 results, with standalone revenue falling 10% year-over-year to Rs 2,105 crore. The decline was mainly due to a drop in exports.

Following the results, management noted that the current financial year would be a challenging one. The company remains cautious about its US export business going forward.

At 10:43 AM, the shares of Bharat Forge were trading 2.71% lower at Rs 1,108.50 on NSE.

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