Marking a strategic expansion, Texmaco has acquired a 100% stake in Jindal Rail Infrastructure Limited. This acquisition is poised to significantly enhance Texmaco’s capabilities and market reach within the railway industry, solidifying its position as a leading player in the sector.
More Details:
Texmaco Rail & Engineering Limited, a leading manufacturer of freight wagons and provider of railway infrastructure in India, has acquired 100% shareholding of Jindal Rail Infrastructure Limited (JRIL). This strategic acquisition, with a cash consideration of Rs. 615 Crores at 8.1x FY 2024 EV/EBITDA, expands Texmaco’s market presence, capabilities, and product offerings in the wagons sector, solidifying its leadership in the industry.
Background:
- Texmaco has announced that it has entered into definitive agreements with Jindal Rail & Infrastructure Limited (JRIL), JITF Urban Infrastructure Services Limited, and Siddeshwari Tradex Private Limited for the acquisition of 100 percent of the share capital of JRIL on a fully diluted basis.
- The transaction is subject to certain adjustments at closing specified in the definitive agreements.
- Texmaco has agreed to acquire the entire shareholding of JRIL for a cash consideration of Rs. 615 Crores which is subject to certain closing adjustments.
- The Enterprise Value of JRIL is Rs. 687 Crores and the transaction represents an acquisition FY 2024 EV/ EBITDA multiple of 8.1x.
- While definitive agreements have been executed today, the transaction is subject to certain conditions precedent for closing which are expected to be completed within 45 days.
Experts Insights:
Mr. Saroj Kumar Poddar, Chairman of Texmaco, said “The Adventz Group has always been committed to participating in India’s development. The JRIL acquisition will exponentially boost our participation in domestic and foreign markets, catalysing the nation’s economic growth.”
Mr. Indrajit Mookerjee, Vice Chairman of Texmaco, said “We are ever focused on forming strategic alliances to boost growth and enhance synergies across the industry, and this low-risk acquisition is in line with our overarching vision.”
Mr. Sudipta Mukherjee, Managing Director of Texmaco, said “This acquisition puts Texmaco Rail to have a significant lead in Freight Rolling stock market within the country and in international Rail Freight Industry map on a shorter term. This also throws open tremendous opportunities to expand more on the whole Railway Rolling Stock and Component Value Chain with foray into newer product lines. We believe Texmaco Rail with its expansion in western India will be more emphatically contributing towards the Government’s Plan of Atma Nirbhar Bharat and Vikshit Bharat.”
Strategic Rationale:
- JRIL is a G-105 certified entity and is focussed on commodity specific special purpose wagons for private sectors and has the ability to supply Indian Railways.
- Texmaco’s technical expertise is set to enhance JRIL’s wagon production with minimal capex.
- JRIL’s 60+ acres surplus land bank enables rapid expansion and flexible manufacturing opportunities for passenger and freight wagons, as well as a components ecosystem.
- Texmaco’s foundry expertise is set to drive future vertical integration at JRIL.
- Unlocking major cost savings through bulk material purchases for Texmaco and JRIL.
- Enhanced EBITDA margins on consolidated basis driven by increased private sector freight car orders.
- Strategic expansion into Western India strengthens Texmaco’s national presence.
Conclusion:
This acquisition marks a significant milestone in Texmaco’ s journey to expand its strategic capabilities and market presence, positioning the Company for sustained growth and innovation in the railway manufacturing industry.
Source: Texmaco – Press Release | Image Credit (representational): Texmaco
