Tega Industries Limited has announced a significant move to strengthen its position in the global mining consumables market. The company has entered into a term sheet to acquire Molycop, a leading global supplier of grinding media for the mining industry, for approximately $1.48 billion. This strategic acquisition is being made in partnership with Apollo Funds, who will serve as a minority investor.

Key Acquisition Details

• Transaction Value: Approximately $1.48 billion
• Expected Closing: By December 31, 2025, or early January 2026, subject to regulatory approvals
• Funding Structure:
  • $248.00 million in equity instruments (preferential allotment and qualified institutional placements)
  • $112.00 million in debt
  • Promoter family to infuse INR 150-200 crores through preferential allotment

About Molycop

Molycop is a renowned supplier of grinding media to the mining industry, with a focus on manufacturing and selling grinding media and chemicals for use in semi-autogenous grinding mills and ball mills. The company serves over 400 mines across 40 countries and has reported an EBITDA of $173.00 million.

Strategic Rationale and Synergies

Mehul Mohanka, Managing Director and Group CEO of Tega Industries, highlighted the strategic fit of the acquisition:

"This strategic complementary acquisition will establish Tega Industries as one of the world's leading designers and manufacturers of 'critical-to-operate' consumables for certain production steps in the mining, mineral processing, and material handling industries, with an innovative and differentiated product portfolio."

The combined entity is expected to benefit from:

• Complementary product portfolios (Tega in polymer mill liners, Molycop in grinding media)
• Enhanced global presence across key mining regions
• 26 manufacturing sites, improving proximity to customers and distribution strength
• Revenue and cost synergies, particularly in SG&A and complementary product sales

Financial Implications and Targets

• EBITDA Margin Expansion: From current 11.50% to 15.00% over time
• Synergy Targets:
  • $20.00 million by year two
  • Scaling to $30.00 million annually from year four
• Consolidated Return on Equity: Target of 18.00%
• Debt Reduction: Aim to lower net debt to EBITDA ratio below 2.5x over four years

Integration and Future Plans

Tega Industries plans to focus on seamless integration over the next two years, including:

• Aligning organizational structures
• Harmonizing systems
• Embedding a unified culture across teams
• Unlocking revenue synergies through complementary opportunities and deeper customer engagement
• Joint R&D and innovation to enhance product portfolio

Market Reaction and Outlook

The acquisition marks a transformational step for Tega Industries, significantly strengthening its leadership position in mining consumables. With the combined expertise and global reach, the company is well-positioned to offer complete mill optimization solutions to its expanded customer base.

Investors and analysts will be closely watching the integration process and the realization of projected synergies. The success of this acquisition could potentially reshape the competitive landscape in the global mining consumables market.

As Tega Industries embarks on this significant expansion, the mining industry will be observing how this newly formed entity leverages its enhanced capabilities to address the evolving needs of mineral processing operations worldwide.

Tega Industries , a prominent player in the industrial machinery sector, has announced a significant financial move that could reshape its future growth trajectory. The company's board of directors has given the green light to a substantial funding plan, aiming to raise up to Rs 4,000.00 crores through various financial instruments.

Board Approval and Funding Details

In a board meeting, Tega Industries' directors approved a comprehensive funding strategy. The plan involves raising capital not exceeding Rs 4,000.00 crores through the issuance of new equity shares and other securities. This move signals the company's intent to bolster its financial position and potentially fuel expansion plans.

Diverse Funding Mechanisms

The company has outlined a flexible approach to raising these funds. The board's approval encompasses various methods, including:

• Public issues
• Preferential allotments
• Private placements
• Qualified Institutional Placements (QIPs)

This multi-pronged strategy allows Tega Industries to tap into different investor segments and optimize its capital raising efforts based on market conditions and investor appetite.

Additional Financial Measures

Alongside the primary funding plan, the board has approved several other significant financial measures, subject to shareholder approval:

1. An increase in the limit for investments, loans, guarantees, or other financial support to other corporate bodies and persons, up to Rs 4,000.00 crores.
2. A boost in the company's borrowing power by an additional Rs 2,000.00 crores.
3. Authorization to create charges on the company's movable and immovable properties to secure potential borrowings.

Regulatory Compliance and Next Steps

The funding plan and associated measures are subject to shareholder approval and necessary regulatory clearances. Tega Industries has stated that it will comply with all relevant regulations, including those set by the Securities and Exchange Board of India (SEBI).

Market Implications

This substantial funding initiative by Tega Industries could have significant implications for the company's future growth and market position. The influx of capital, if successfully raised, may enable the company to pursue strategic initiatives, expand its operations, or strengthen its balance sheet.

As the company moves forward with this ambitious plan, investors and market watchers will be keenly observing how Tega Industries utilizes these funds to drive value and maintain its competitive edge in the industrial machinery sector.