SKF India Shares Adjust 54% Down on Demerger; Actual Market Decline Only 5%

SKF India shares witnessed a sharp 54% drop in opening price on October 15, falling to Rs 2,395.85 from the previous close of Rs 5,010.75. However, this dramatic decline was primarily due to a price adjustment following the demerger of the company's automotive and industrial businesses, with the actual market-driven fall being approximately 5%.

Demerger Details

The demerger, which became effective on October 1, with October 15 set as the record date for shareholder eligibility, has led to the creation of two separate entities:

SKF India (Automotive): Represented by the existing SKF India shares
SKF India (Industrial): A new entity whose shares are expected to list in November 2024

As part of the demerger process, shareholders will receive one share of SKF India (Industrial) for every share held in the parent company.

Stock Performance

The stock hit its lower circuit at Rs 2,276.10 following the adjustment. This price movement reflects the market's initial reaction to the restructured company, focusing solely on the automotive business.

Strategic Rationale

SKF India stated that this restructuring aims to create two focused organizations with dedicated management teams. The company believes this will improve agility in responding to market dynamics, potentially enhancing value for shareholders in both segments.

Investor Implications

Investors should note that while the share price appears to have dropped significantly, this is largely an accounting adjustment. The combined value of shares in both entities post-demerger is expected to be comparable to the pre-demerger value, subject to market conditions.

Future Outlook

The listing of SKF India (Industrial) shares, scheduled for November 2024, will be a key event for investors to watch. It will provide a clearer picture of the market's valuation of the two separate businesses.

Shareholders and potential investors are advised to evaluate both entities independently based on their respective business prospects, financials, and market positions in the automotive and industrial sectors.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.28%	-54.38%	+1.13%	-43.16%	-9.02%	+233.56%

SKF India Limited has issued a postal ballot notice seeking shareholder approval for three significant resolutions through remote e-voting. The company is navigating important changes following the demerger of its Industrial Business, which became effective from October 1, 2025.

Material Related Party Transactions

The first resolution concerns the approval of material related party transactions with SKF India (Industrial) Limited, the resulting company from the demerger. SKF India is seeking authorization for transactions up to ₹19,355.00 million for the financial year 2025-26 and thereafter until the next annual general meeting or fifteen months from the 64th Annual General Meeting, whichever is earlier.

These transactions include:

Transaction Type	Amount (₹ in millions)
Reimbursements of expenses paid by SKF India	9,625.00
Services provided under Interim Service Agreement	813.00
Sales of trading goods and services	1,038.00
Reimbursements paid by SKF India (Industrial)	1,000.00
Purchase of products for non-consenting customers	3,047.40
Purchase of trading goods and services	3,359.30
Other services and transactions	472.30

The proposed transactions are deemed crucial for maintaining operational efficiency and maximizing shareholder value post-demerger. They are designed to ensure seamless supply chains, shared technological expertise, and coordinated market strategies between the two entities.

Leadership Changes

New Managing Director

The second resolution addresses the appointment of Mr. Shailesh Kumar Sharma as the new Managing Director of SKF India for a term of five years, effective from October 1, 2025. Mr. Sharma has over 32 years of experience in precision engineering industries and has been leading manufacturing, sourcing, and logistics at SKF in India and Southeast Asia.

Non-Executive Director Appointment

The third resolution pertains to the appointment of Mr. Mukund Vasudevan as a Non-Executive Director. Mr. Vasudevan, who has been serving as the Managing Director since April 8, 2024, will transition to this new role following his resignation from the Managing Director position, effective September 30, 2025.

E-Voting Details

Shareholders can cast their votes electronically from October 17, 2025, at 9:00 AM (IST) until November 15, 2025, at 5:00 PM (IST). The results of the postal ballot will be announced by November 18, 2025.

These resolutions reflect SKF India's efforts to adapt its corporate structure and leadership in line with the recent demerger, while ensuring continued operational efficiency and compliance with regulatory requirements.