Ring Plus Aqua, the auto components business arm of Raymond Ltd, has entered the forgings industry with the acquisition of Trinity India, a Pune-based forged component manufacturer. The Raymond subsidiary spent Rs 54 crore to pick up 78 percent of Trinity India. The deal was funded through internal accruals and facilitated by Equirus Capital. Autocar Professional had reported about the company’s plan of entering the forgings business through an acquisition in its July 15, 2011 issue.
The new step is part of the Raymond Group’s strategy of notching a cumulative turnover of Rs 1,200 crore in the next five years. Trinity India has a sales turnover of around Rs 80 crore but has been struggling financially due to lack of funds. Ring Plus Aqua plans to invest Rs 40-50 crore in Trinity India during the next financial year.
A company source told Autocar Professional that the target is to grow Trinity India’s business to Rs 400-500 crore in the next five years. The ramp up will be crucial if it is to tap the business potential in forged components. The Indian forging industry is estimated at about US$ 2.9 billion, while the global industry is valued at over US$ 115 billion.
“This move significantly strengthens the company’s position in the global automotive powertrain domain. With this acquisition, we are looking at added revenue of Rs 80 crore during the current financial year,” says Harshal Jayavant, president – Engineering Business, Raymond (pictured).
Ring Plus Aqua, which is a key supplier of critical components like flywheel ring gears, flexplate assemblies, integral shaft bearings and sheet metal pulleys, expects to close the current financial year with a turnover of over Rs 150 crore.
“Our expansion into forgings also provides us an opportunity to look at the fast developing non-auto sectors like power, aviation, defence and nuclear equipment.”
Trinity India has an installed forging capacity of 12,500 tonnes. It employs about 400 people. The company supplies hubs, spindles, connecting rods and similar components to OEMs like Ford, Maruti Suzuki, Tata Motors, Fiat, Bosch, Eaton, and Dana.
Sumantra Barooah