Craftsman Automation Limited has informed the stock exchanges about the conversion of securities held in its wholly-owned subsidiary Sunbeam Lightweighting Solutions Private Limited. The conversion involves Compulsorily Convertible Preference Shares (CCPS) and Optionally Convertible Debentures (OCDs) worth ₹97.60 crores being converted into equity shares of Sunbeam.

Board Approval and Conversion Details

The Board of Directors of Sunbeam Lightweighting Solutions Private Limited approved the conversion at their meeting held on December 19, 2025. The approval was based on a Conversion Request Notice submitted by Craftsman Automation Limited.

The conversion details are as follows:

Impact on Capital Structure

The conversion will result in an increase in the equity share capital of Sunbeam Lightweighting Solutions Private Limited. However, this corporate restructuring does not affect the ownership dynamics between the parent and subsidiary companies.

Shareholding Pattern Remains Unchanged

Despite the conversion of these financial instruments, Craftsman Automation's shareholding in Sunbeam will continue to remain at 100.00%. The company has clarified that this conversion does not result in any change in the overall shareholding pattern of Craftsman Automation in its subsidiary.

Regulatory Compliance

The announcement was made in compliance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has informed both BSE Limited and National Stock Exchange of India Limited about this corporate action.

Key regulatory details include:

Business Implications

This conversion represents a strategic financial restructuring within the Craftsman Automation group. By converting preference shares and debentures into equity shares, the subsidiary's capital structure becomes simplified while maintaining the same ownership control. The transaction demonstrates the company's focus on optimizing its subsidiary's financial architecture without diluting its ownership stake.

Craftsman Automation received a credit rating reaffirmation from CRISIL Ratings Limited on December 12, 2025, maintaining its strong position in the auto-engineering contract-manufacturing sector. The rating agency reaffirmed the AA-/Stable rating for long-term facilities and A1+ rating for short-term facilities while significantly enhancing the company's bank loan facilities.

Rating Enhancement and Financial Metrics

CRISIL enhanced Craftsman Automation's total bank loan facilities substantially, reflecting the company's growing business requirements and strong credit profile.

For subsidiary DRAxion India Private Limited, CRISIL also reaffirmed ratings while enhancing facilities to ₹525.00 crores from ₹313.97 crores, maintaining the same AA-/Stable and A1+ ratings.

Strong Business Performance Drives Rating Confidence

The rating reaffirmation reflects robust business performance, particularly in the aluminum segment which has significantly improved overall revenues. Consolidated operating revenues increased to ₹3,786.00 crores during the first half of fiscal 2025 from ₹2,365.00 crores in the previous corresponding period, primarily driven by 26.00% revenue growth in standalone operations.

The aluminum segment demonstrated exceptional growth of 41.00% in the last fiscal, contributing significantly to overall revenue growth of 28.00% to ₹5,693.00 crores from ₹4,452.00 crores in fiscal 2024.

Operational Excellence and Market Position

Craftsman Automation maintains its established position across diversified customer relationships in the auto-engineering space. The company operates through three main business segments: powertrain products serving commercial vehicles and passenger vehicles, aluminum products for two-wheeler and four-wheeler manufacturers, and industrial engineering solutions.

Operating margins remained healthy at 15.00% in the first half of fiscal 2026, compared to 16.50% in the previous corresponding period. The slight moderation was attributed to lower contribution from subsidiaries Sunbeam Lightweighting Solutions Private Limited (SLSPL) and Craftsman Germany, while core operations at Craftsman Automation and DRAxion maintained strong margins.

Financial Risk Profile and Capital Management

The company's financial metrics demonstrate adequate debt management despite increased capital expenditure requirements. Key financial indicators show measured debt levels with strategic capital allocation.

Debt levels are expected to rise to ₹3,500.00 crores by end of fiscal 2026 from ₹2,141.00 crores as of March 31, 2025, mainly due to increased working capital requirements and capital expenditure of ₹1,200.00 crores for modernization and expansion projects.

Strategic Acquisitions and Expansion

The company successfully completed fund raising of ₹1,200.00 crores through Qualified Institutional Placement in June 2024, utilizing proceeds for debt reduction of over ₹650.00 crores and strategic acquisitions. Recent acquisitions include SLSPL and increased shareholding in DRAxion to 100.00%, enhancing manufacturing capabilities and customer base.

Outlook and Rating Sensitivity

CRISIL maintains a stable outlook based on Craftsman Automation's established market position, strong customer relationships, and healthy operating efficiency. The rating agency expects gradual improvement in debt metrics over the medium term through higher cash accruals, managed capital expenditure plans, and potential asset monetization.

The ratings remain sensitive to sustained business performance, prudent capital spending, and maintenance of debt metrics within acceptable ranges. Any significant debt-funded expansion or material deterioration in operating performance could impact the rating profile.