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.

Shriram Pistons & Rings Limited has announced a major strategic acquisition, entering into a definitive agreement to acquire 100% shareholding in Grupo Antolin's Indian operations for EUR 159 million, approximately ₹16,700.00 crores on a debt-free, cash-free basis. The transaction, expected to be completed by January 2026, marks a significant step in the company's diversification strategy into powertrain-agnostic automotive products.

Acquisition Details

The acquisition encompasses three key entities in Grupo Antolin's Indian operations:

These companies operate five state-of-the-art manufacturing facilities strategically located with two facilities each in Chakankar and Pune, and one facility in Chennai. The acquired entities generated annual revenues of ₹1,179.10 crores in the financial year 2024-25, operating at EBITDA margins of 9-10%.

Product Portfolio and Market Position

The acquired companies are leading suppliers of automotive interior solutions in India, manufacturing a comprehensive range of products including headliner substrates, modular headliners, sun visors, door panels, central floor consoles, pillar trim, front-end carriers, exterior plastic parts, overhead consoles, dome lamps, ambient lighting, touch panels, and capacitive pads.

The companies serve major OEMs across India in the passenger vehicle segment, including established relationships with:

• Tata Motors
• Mahindra & Mahindra
• Volkswagen India
• Hyundai
• Renault
• Maruti Suzuki (through Krishna Maruti JV)
• Toyota

Strategic Benefits and Technology Partnership

As part of the transaction, Shriram Pistons & Rings will establish a long-term technology licensing agreement with Antolin, the global parent company headquartered in Spain. Antolin operates 111 factories across 23 countries with approximately 20,000 employees and reported revenues of EUR 4.19 billion in calendar year 2024.

The acquisition is expected to enhance Shriram Pistons & Rings' consolidated results, with powertrain-agnostic products expected to constitute around 35% of consolidated revenue post-acquisition. This strategic move aims to diversify the company's business model while positioning it as a multi-product organization.

Financial Structure and Growth Outlook

The acquisition will be financed primarily through the company's existing cash reserves, with minimal debt requirements. Management expects the overall debt-equity ratio to remain below 0.30-0.40 post-acquisition. The acquired companies demonstrate strong financial metrics with high return on capital employed (ROCE) and robust cash generation capabilities.

The management highlighted that the acquired entities have achieved cumulative compound annual growth rate (CAGR) of over 10% in the last five years, excluding formative years. The companies are expected to continue this growth trajectory while potentially benefiting from cost structure improvements and overhead reductions following the transition from global to local ownership.

Market Leadership and Competitive Positioning

The acquired companies hold market-leading positions in roof liners and headliners business in India, with significant market share across various customer segments. The business benefits from unique patented processes in forming and molding technologies that enhance product stability and properties when integrated into vehicle interiors.

The ambient lighting segment presents particular growth opportunities, as this technology is expected to become increasingly popular across all vehicle categories. The companies' expertise in touch panels and capacitive pads positions them well for future automotive interior technology trends.

This acquisition builds on Shriram Pistons & Rings' recent strategic investments in TGPEL, EMFI, and Takahata, all focused on manufacturing powertrain-agnostic products in the automotive industry. The transaction reinforces the company's commitment to delivering high-quality automotive solutions while expanding its product portfolio in areas independent of internal combustion engine powertrains.