Ram Ratna Wires Ltd, a leading Indian producer of super enameled copper winding wires, has made a strategic move to strengthen its foothold in India’s booming renewable energy and infrastructure sectors by acquiring a 60% stake in Tefabo Product Pvt Ltd. Announced on November 7, 2024, the acquisition agreement, which includes a Share Purchase Agreement (SPA) and a Shareholders' Agreement (SHA), will see Ram Ratna Wires Ltd take control of Tefabo, while Mr. Anup Balkrishna Vaidya retains the remaining 40% stake in the company. Tefabo, with its comprehensive fabrication setup, serves multiple multinational corporations (MNCs), offering critical fabricated components and assemblies essential to renewable energy and other infrastructure projects.

Expanding into Renewable Energy and Infrastructure

This acquisition underscores Ram Ratna’s commitment to enhancing its role in India’s renewable energy expansion and infrastructure transformation. As India pursues ambitious goals, such as achieving 500 GW of renewable energy by 2030 and aiming for carbon neutrality by 2070, companies like Ram Ratna are seizing opportunities to contribute through innovation and industry expertise. Tefabo’s existing client base, including MNCs, and its significant expertise in fabricating components, position Ram Ratna as a vital player in India’s infrastructural and renewable energy ecosystem.

In addition to renewable energy, Ram Ratna’s new direction aligns with its objective to meet the evolving needs of sectors like railways, which are critical to India's growth in infrastructure. As Tefabo’s operations integrate within Ram Ratna, the company is set to offer enhanced solutions that cater to both sustainability and modern transportation demands, positioning itself as a trusted provider of advanced components to support India’s infrastructural vision.

Financial Growth and Performance of Tefabo

Tefabo’s financial performance reflects its solid market position and growth potential. For the fiscal year ending March 31, 2024, Tefabo reported a turnover of Rs. 7,815.18 lakh, a substantial increase from previous years, showcasing its expanding market reach. The company has demonstrated consistent growth in Revenue from Operations, increasing from Rs. 3,748.19 lakh in FY 2022 to Rs. 5,681.98 lakh in FY 2023, eventually reaching Rs. 7,815.18 lakh in FY 2024.

Additional financial metrics emphasize Tefabo’s profitability and efficient capital utilization:

• EBITDA (Excl Other Income): Rs. 698.37 lakh in FY 2024, up from Rs. 194.66 lakh in FY 2023
• PAT (Profit After Tax): Rs. 436.65 lakh in FY 2024, reflecting strong earnings
• Return on Capital Employed (ROCE): Increased to 27.76% in FY 2024
• Return on Equity (ROE): Rose to 66.43%, signifying robust shareholder returns

Strategic Synergies for Sustainable Growth

Through Tefabo, Ram Ratna Wires Ltd aims to strengthen its portfolio of fabricated components and leverage Tefabo’s expertise in providing critical parts for the renewable energy sector. This acquisition is anticipated to be earnings accretive for Ram Ratna’s shareholders, bolstering its revenue streams and opening up new avenues in renewable energy and railways.

According to Shri Mahendrakumar Kabra, Managing Director of Ram Ratna Wires Ltd, this acquisition aligns with the company’s mission to offer innovative solutions for a sustainable future. "With our entry into fabricated components and assemblies, we aim to enhance our contribution to a sustainable future by addressing the evolving needs of our clients," he stated, emphasizing the company's dedication to engineering excellence and sustainable practices.

Expanding Client Base and Industry Impact

The renewable energy sector in India has witnessed robust growth, with projections indicating further expansion. As an established provider of super enameled copper wires, Ram Ratna Wires Ltd is positioned to capitalize on this growth by supplying fabricated components that are in demand within both domestic and international markets. This strategic acquisition not only enhances Ram Ratna’s product portfolio but also enables it to access Tefabo’s existing client base and reputation in the industry.

By acquiring Tefabo, Ram Ratna can integrate its resources and engineering expertise into Tefabo’s operations, thereby enhancing its market share in the fabrication and renewable energy domains. The acquisition also aligns with India's infrastructure and renewable energy goals, supporting the country's ongoing transformation and sustainable development objectives.

This acquisition marks a significant milestone for Ram Ratna Wires Ltd as it ventures into the fabrication industry, adding a complementary segment to its well-established business model. With growing demand for renewable energy solutions and India’s focus on green energy initiatives, Ram Ratna Wires Ltd is well-positioned to contribute meaningfully to India’s clean energy targets. The company’s investment in Tefabo demonstrates its long-term vision and commitment to sustainability.

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This acquisition by Ram Ratna Wires Ltd is a pivotal step, marking a new chapter in its journey toward supporting India's infrastructure goals and renewable energy transition while enhancing value for its stakeholders.