Bharat Forge Limited (BFL), one of India’s leading multinational companies in the forging industry, has announced the successful conversion of a loan extended to its wholly owned subsidiary, Bharat Forge America, Inc. (BFA), into equity in the form of Additional Paid-in Capital. The conversion process was completed on March 31, 2025, in accordance with the regulatory provisions and SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015.

This update follows Bharat Forge’s earlier intimation dated August 8, 2024, where the company informed stakeholders of its intention to convert the loan into equity in Bharat Forge America, Inc. The conversion process, which aimed to strengthen the capital structure of its US-based subsidiary, has now been successfully finalized.

Details of the Conversion Process:

The loan extended to Bharat Forge America, Inc. has been converted into equity in the form of Additional Paid-in Capital (APIC). This move is expected to provide financial flexibility to the subsidiary, supporting its business operations and enabling future growth initiatives. With this conversion, Bharat Forge has reinforced its commitment to strengthening its international presence and enhancing the financial stability of its overseas operations.

Rationale Behind the Conversion:

The decision to convert the loan into equity is part of Bharat Forge’s long-term strategy to optimize its capital structure and streamline financial management in its overseas subsidiaries. This move allows Bharat Forge America, Inc. to reduce its debt burden while simultaneously increasing its equity base, ensuring greater financial stability and future growth potential.

Strategic Importance of Bharat Forge America, Inc.:

Bharat Forge America, Inc. is a wholly owned subsidiary of Bharat Forge Limited, strategically positioned to cater to the North American market. The subsidiary specializes in providing high-quality forged components for various industries, including automotive, aerospace, and industrial applications. Strengthening its capital structure through equity infusion is expected to boost BFA’s operational efficiency and facilitate the execution of new growth initiatives in the US market.

Compliance with Regulatory Framework:

Bharat Forge Limited has ensured that the conversion process complies with all applicable regulatory guidelines, including Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has also fulfilled the necessary reporting obligations with the BSE Limited and the National Stock Exchange of India Limited (NSE).

Impact on Bharat Forge’s Financial Position:

The conversion of the loan into equity will not have any adverse financial impact on Bharat Forge Limited’s consolidated financial position. On the contrary, it enhances the financial strength of Bharat Forge America, Inc., allowing it to focus on expanding its market presence and pursuing growth opportunities. The infusion of Additional Paid-in Capital is expected to improve the subsidiary’s creditworthiness and financial standing.

Future Growth Prospects:

This development underscores Bharat Forge’s strategy to strengthen its global operations while maintaining a robust financial position. By enhancing the capital structure of its US subsidiary, Bharat Forge is paving the way for future investments and expansion in North America, which remains a key market for the company.

Next Steps and Way Forward:

Bharat Forge remains committed to ensuring that its subsidiaries maintain strong financial discipline and comply with global governance standards. The successful conversion of the loan to equity in Bharat Forge America, Inc. is a testament to the company’s dedication to maintaining a strong foothold in international markets while adhering to the highest standards of corporate governance.

Stakeholders are advised to take note of this update and expect further developments as Bharat Forge continues to explore strategic opportunities across its global operations.

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