In a significant move to bolster its manufacturing and technological capabilities, TechEra Engineering (India) Limited has recently acquired a 26.02% stake in Kalbhorz Electric Private Limited (KEPL). This acquisition is not just a strategic investment but a calculated step towards enhancing TechEra’s presence in critical sectors such as defence, aerospace, and robotics.

Understanding Kalbhorz Electric Private Limited

Kalbhorz Electric, established on January 11, 2023, specializes in the manufacturing, marketing, distributing, and trading of electronic parts and appliances. These products cater to various sectors, including aircraft components, defence, robotics, aerospace, and marine industries. Headquartered in Pune, Maharashtra, KEPL is on the cutting edge of developing innovative technologies, particularly in the field of electric powertrains for e-mobility.

As per the audited financial statements for the fiscal year 2023-24, KEPL reported:

Revenue from Operations & Other Income: ₹6,46,611

▪ EBITDA: ₹11,24,742

▪ Profit Before Tax (PBT): ₹20,80,153

▪ Profit After Tax (PAT): (₹21,19,758)

▪ Net Worth as of March 31, 2024: ₹2,90,38,622

This financial snapshot highlights KEPL’s growth potential, especially considering its focus on sectors like defence, where demand for innovative solutions is rapidly increasing.

The Acquisition Details

This acquisition falls under related party transactions, as TechEra already holds 11.91% of KEPL’s issued, subscribed, and paid-up equity share capital. The recent transaction, valued at ₹1,33,41,498 for 2,823 equity shares, marks an increase in shareholding from 11.91% to 26.02%. The purchase price of ₹4,726 per share includes a premium of ₹4,716.

The acquisition is structured to be conducted at arm’s length, with a valuation report from a Registered Valuer to ensure fairness in pricing. Notably, no additional regulatory approvals were required for this investment, streamlining the process for TechEra.

Strategic Objectives of the Acquisition

The primary objective behind TechEra’s acquisition of KEPL is to leverage the latter's expertise and technology for advancing its own capabilities in manufacturing. The promoters of KEPL approached TechEra in December 2023 with the intention of attracting investment for the next stages of growth. With this influx of capital, KEPL aims to enhance research and development efforts over the next two years, particularly focusing on products that meet the requirements of the Indian Navy.

Moreover, KEPL is actively involved in collaborative projects with German Original Equipment Manufacturers (OEMs) in the high-power commercial vehicle segment. This move to broaden its product line and innovate within the automotive industry showcases KEPL’s commitment to expanding its market footprint.

Future Prospects

As KEPL prepares for commercial sales and production slated for FY 2024-25, the investment from TechEra is set to significantly impact its trajectory. The company is finalizing two products for the Indian Navy, with a potential order value of approximately ₹30 crores pending approval from the Ministry of Defence.

With the rapid growth in sectors like defence and aerospace, driven by increasing governmental focus on indigenous manufacturing, the acquisition positions TechEra and KEPL advantageously within a market ripe with opportunities. KEPL's accolades, including two awards from the Defence Innovation Organization under the IDEX program, underscore its innovative capabilities and commitment to excellence.

Conclusion

In conclusion, TechEra Engineering's acquisition of 26.02% of Kalbhorz Electric is a strategic move that aligns with its long-term vision of strengthening its foothold in the defence and aerospace sectors. By investing in a company that is pushing the boundaries of technology in electric powertrains and electronic components, TechEra is not just acquiring a stake but also gaining access to cutting-edge innovations that will shape the future of these critical industries.

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