Shriram Pistons & Rings Limited has entered into an asset purchase agreement with Sunbeam Lightweighting Solutions Private Limited to acquire piston manufacturing assets for ₹28.00 crores. This strategic move aims to enhance the company's production capacity and strengthen its position in the automotive ancillary sector.

Asset Purchase Agreement Details

The company disclosed this development through a regulatory filing, in compliance with SEBI listing regulations. The transaction involves acquiring identified plant and machinery assets along with related books and records forming part of a piston manufacturing line from Sunbeam Lightweighting Solutions, a wholly-owned subsidiary of Craftsman Automation Limited.

Strategic Objectives and Business Impact

The acquisition aligns with Shriram Pistons & Rings' principal line of business and aims to strengthen the company's existing piston manufacturing operations. The management expects this strategic move to enhance manufacturing capacity and improve operational efficiencies across their production facilities.

The proposed transaction is designed to expand the company's manufacturing capabilities in the automotive ancillary sector, specifically targeting increased piston production capacity to meet growing market demand.

Transaction Structure and Terms

The deal is structured as a piecemeal asset purchase to be completed in two separate tranches, subject to fulfillment of conditions precedent as specified in the agreement. The transaction includes several standard commercial terms:

• Transfer of possession of identified plant and machinery upon completion of each tranche
• Customary conditions precedent and representations
• Standard warranties and indemnities
• Non-compete obligations as per industry practice
• Related books and records transfer

Regulatory and Financial Aspects

Shriram Pistons & Rings confirmed that this transaction does not qualify as a related party transaction and is being undertaken on an arm's length basis. The company's promoter and promoter group entities have no interest in the seller entity, ensuring complete independence in the deal structure.

The total consideration of ₹28.00 crores will be discharged through cash payments in accordance with the terms specified in the Asset Purchase Agreement. The consummation of this proposed transaction remains subject to the fulfillment of closing conditions and completion of closing deliveries as stipulated under the agreement.

Shriram Pistons & Rings Limited has received a significant credit rating update from India Ratings and Research (Ind-Ra), a Fitch Group company. The rating agency has placed Shriram Pistons & Rings' long-term issuer rating on Rating Watch with Positive Implications, covering ₹4,889.20 million in bank facilities and a new commercial paper programme.

Rating Actions Overview

India Ratings has taken multiple rating actions on Shriram Pistons & Rings Limited and its debt instruments, with the most notable being the placement of ratings on Rating Watch with Positive Implications. This development suggests potential for future rating upgrades based on the company's improving credit fundamentals.

Commercial Paper Programme Details

The rating agency has assigned an IND A1+ rating to the company's commercial paper programme worth ₹10,000.00 million. The commercial paper has a maturity period of up to 365 days and represents a significant addition to the company's funding options. This rating reflects the company's strong short-term creditworthiness and ability to meet its immediate financial obligations.

Bank Facilities Breakdown

The comprehensive rating covers an extensive network of banking relationships across multiple leading financial institutions. The facilities are distributed among various banks including State Bank of India, HDFC Bank Limited, Axis Bank Limited, IDBI Bank, Citibank N.A., HSBC, DBS Bank India Limited, and ICICI Bank.

Fund-Based Working Capital Facilities:

• State Bank of India: ₹550.00 million
• HDFC Bank Limited: ₹170.00 million and ₹1,259.20 million (term loan)
• Axis Bank Limited: ₹203.00 million
• IDBI Bank: ₹300.00 million
• Citibank N.A.: ₹296.00 million and ₹330.00 million (term loan)
• HSBC: ₹131.00 million and ₹220.00 million (term loan)
• DBS Bank India Limited: ₹50.00 million
• ICICI Bank: ₹300.00 million

Non-Fund Based Working Capital Facilities:

• State Bank of India: ₹50.00 million
• HDFC Bank Limited: ₹430.00 million
• Axis Bank Limited: ₹330.00 million
• IDBI Bank: ₹300.00 million
• Citibank N.A.: ₹324.50 million
• HSBC: ₹115.50 million
• DBS Bank India Limited: ₹200.00 million
• ICICI Bank: ₹250.00 million

Regulatory Compliance and Disclosure

The rating intimation has been made pursuant to Regulation 30 read with Schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has fulfilled its regulatory obligations by informing both the National Stock Exchange of India Limited and BSE Limited about these rating developments.

The rating letters and related documentation have been made available on the company's website at www.shrirampistons.com , ensuring transparency and accessibility for all stakeholders.