Timken India has announced an extension to the completion timeline for its strategic acquisition of a 26.1% stake in Sunstream Green Energy C&I Three Private Limited. The company informed stock exchanges that the transaction, originally scheduled for completion by December 2025, is now expected to be completed on or before March 2026.

Updated Transaction Timeline

In a regulatory filing dated December 31, 2025, Timken India provided an update on the acquisition agreement, extending the completion deadline by three months. The company had initially entered into the agreement in September 2025 with a December 2025 completion target.

Strategic Purpose

The acquisition remains focused on enabling Timken India to purchase power under the Group Captive Scheme through its investment in Sunstream Green Energy C&I Three Private Limited. This strategic move represents the company's expansion into the renewable energy sector, diversifying beyond its traditional bearings and mechanical components business.

Regulatory Compliance

The update was communicated to both the National Stock Exchange of India Limited and BSE Limited under Regulation 30, ensuring transparency with stakeholders regarding the timeline adjustment. Company Secretary and Chief Compliance Officer Mandar Vasmatkar signed the regulatory filing, maintaining proper corporate governance protocols.

Market Context

The timeline extension reflects the complex nature of renewable energy sector transactions, where regulatory approvals and due diligence processes often require additional time. The commercial and industrial green energy segment continues to represent a growing opportunity as businesses increasingly adopt sustainable energy practices to meet environmental goals and reduce operational costs.

Timken India Limited has received a significant update regarding its income tax demand notice, with the amount being reduced from ₹74.77 crores to ₹32.47 crores following a rectification order issued by the Income Tax Department for assessment year 2022-23.

Rectification Order Details

The Deputy Commissioner of Income Tax, Circle 1, Jamshedpur issued a rectification order dated December 24, 2025, addressing the company's petition filed on December 19, 2025. The rectification petition highlighted that the company was liable to pay tax at a rate of 25.168%, while the IT Department had erroneously calculated the tax demand at a rate of 34.94%.

Background of Transfer Pricing Dispute

The original income tax demand stemmed from an order passed under Section 143(3) read with Section 144C(13) and Section 144B of the Income Tax Act, 1961. The IT Department had disagreed with Timken India's transfer pricing methodology for its distribution segment and adopted alternative methods to determine arm's length pricing in transactions with associated enterprises.

Company's Response and Future Actions

Despite the substantial reduction in the tax demand, Timken India maintains that the revised order and demand notice remain "erroneous, flawed and are not sustainable." The company continues to plan filing an appeal before the appropriate authority to get the orders and demand notices quashed or rectified entirely.

Timken India has reiterated that it does not anticipate any immediate financial or monetary impact from these developments. The company disclosed this update pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, maintaining transparency with stakeholders regarding this significant regulatory development.