Kirloskar Oil Engines Limited (KOEL) has announced a significant corporate restructuring, transferring its Business to Customer (B2C) segment to its wholly-owned subsidiary, La-Gajjar Machineries Private Limited (LGM), through a slump sale. This strategic move, approved by KOEL's Board of Directors on October 10, 2025, is set to take effect from October 11, 2025.

Transaction Details

The transfer involves KOEL's Water Management Solutions (WMS) - Domestic & Exports Business, collectively known as the B2C Segment. As consideration for this transfer, LGM will issue 10,65,150 equity shares with a face value of INR 10 each to KOEL on a private placement basis.

Financial Impact

The B2C segment being transferred contributed significantly to KOEL's financial performance in the fiscal year 2024-25:

Strategic Rationale

This reorganization is a continuation of KOEL's three-year strategy to separate its B2C and B2B operations. The company aims to:

1. Drive operational efficiencies
2. Streamline go-to-market channels
3. Optimize resource allocation
4. Create a simplified corporate structure

KOEL expects this move to position both entities for accelerated and sustainable long-term growth, enhancing their product portfolios and core capabilities.

Implications for Shareholders

While this is a related party transaction between KOEL and its wholly-owned subsidiary, the company has stated that the deal is conducted on an arm's length basis. There will be no change in the shareholding pattern of KOEL as a result of this transaction.

Market Outlook

This strategic integration is expected to sharpen KOEL's focus on its B2C segment operations, which the company views as a key pillar of its long-term growth strategy. By creating a more agile and simplified organizational structure, KOEL aims to strengthen its market leadership, accelerate product innovation, and deliver enhanced value to both customers and shareholders.

As the business landscape continues to evolve, this move by Kirloskar Oil Engines Limited demonstrates the company's proactive approach to adapting its structure for future growth and efficiency. Investors and market watchers will likely keep a close eye on how this restructuring impacts the company's performance in the coming quarters.

Kirloskar Oil Engines Limited (KOEL) has disclosed a Deed of Family Settlement (DFS) dated September 11, 2009, involving individual members of the Kirloskar family. This disclosure comes after the company obtained a legal clarification from the Securities and Exchange Board of India (SEBI) through a writ petition filed before the Bombay High Court.

Key Points of the Disclosure

• The disclosure follows SEBI's clarification that mere disclosure of an agreement by a listed entity does not imply the company's admission of the agreement being binding or impacting its management, control, or creating any liability.
• KOEL emphasized that it is not a party to the family settlement, has never ratified it, and the deed does not impose any restrictions or create liabilities for the company.
• The family settlement involved the distribution of shares among five family members across various Kirloskar Group companies.

Details of the Family Settlement

The 2009 family settlement involved five key members of the Kirloskar family:

1. Atul Kirloskar
2. Sanjay Kirloskar
3. Vikram Kirloskar
4. Rahul Kirloskar
5. Gautam Kulkarni

The settlement included share transfers, cash payments, and restructuring of holdings through investment companies within the Kirloskar Group.

SEBI's Clarification

SEBI provided a significant clarification during the court proceedings, stating that:

• The mere disclosure of an agreement by a listed entity does not automatically bind the company.
• Such disclosure does not imply the company's admission of the agreement's impact on its management or control.
• Listed entities may include a disclaimer as part of their disclosure.

Company's Stance

In its disclosure, Kirloskar Oil Engines Limited made the following points clear:

• The company is neither a party to the DFS nor has it ever taken the DFS on record.
• KOEL has not ratified or approved the DFS and has not agreed to be bound by it.
• The company does not admit that the DFS has any impact on its management or control.
• The DFS does not impose any restrictions or create any liabilities for KOEL.

Implications

This disclosure by Kirloskar Oil Engines Limited highlights the complex nature of family-owned businesses and the importance of clear communication with shareholders regarding family settlements. It also underscores the regulatory environment's evolving nature, where SEBI's clarifications provide listed entities with more flexibility in disclosing family agreements without necessarily binding the company to such agreements.

The disclosure serves to maintain transparency with investors while protecting the company's interests and clarifying its position regarding the family settlement. This move may help in maintaining investor confidence by clearly delineating the company's obligations and liabilities from those of its promoter family members.

As the Kirloskar Group continues to navigate its corporate structure and family dynamics, this disclosure marks an important step in ensuring clear communication and corporate governance standards.