Restructuring strategy revealed by Gabriel India, triggering a 20% surge in stocks
Gabriel India, a leading player in the production of ride control products, has unveiled a significant strategic restructuring plan in collaboration with Asia Investments Private Limited (AIPL) and Anchemco India. This composite scheme of arrangement aims to transform Gabriel India into a diversified automotive components company and consolidate its automotive business operations.
The key components of the plan involve the merger of Anchemco into AIPL, consolidating the automotive businesses and joint venture investments under AIPL. Subsequently, AIPL's demerged automotive business, including Anchemco's operations and joint venture stakes in Dana Anand, Henkel Anand, and Anand CY Myutech Automotive, will be transferred into Gabriel India.
In a move to facilitate this consolidation, Gabriel India will issue 1,158 equity shares (₹1 face value) for every 1,000 shares of AIPL (₹10 face value), at an 8× FY25 EV/EBITDA valuation, with no cash or debt payout. This restructuring is scheduled to take effect from April 1, 2025, with completion expected within 10–12 months after regulatory approvals.
This strategic realignment is set to transform Gabriel India from a primarily suspension parts and shock absorber manufacturer into a diversified automotive components company. The diversification will encompass new product lines such as drivetrain components for electric vehicles (EVs), Body-in-White and NVH solutions, synchronizer rings, aluminum forgings, and sunroofs.
This expansion will enhance Gabriel's market reach across various vehicle segments—two-wheelers, three-wheelers, four-wheelers, and commercial vehicles—and tap into aftermarket opportunities. The restructuring positions Gabriel India as a technology-driven mobility solutions provider, supporting the Anand Group's ambitious revenue target of ₹50,000 crore by 2030, with Gabriel as the primary growth engine.
Anjali Singh, chairperson of Gabriel India, stated that the scheme aligns with the group's strategy to realign its corporate structure, enhancing its competitive position. The transformation is anticipated to reduce dependence on a single product line by expanding into new segments, geographies, aftermarket products, and railway product offerings.
Following the announcement, Gabriel India's stock price increased by 19.99% to Rs 862.75 on the BSE. The consolidation is expected to accelerate profitable growth with improved margins, thereby creating significant shareholder value through earnings per share (EPS) accretion and higher returns on equity.
With the completion of this strategic restructuring, AIPL and other promoters will hold 63.5% of Gabriel India, while the public will hold 36.5%. This restructuring is a significant step towards Gabriel India's goal of becoming a leading player in advanced automotive technologies and markets over the next decade.
- The restructuring plan involves AIPL's demerged automotive business, including its operations and joint venture stakes in Dana Anand, Henkel Anand, Anand CY Myutech Automotive, being transferred into Gabriel India, transforming Gabriel India into a diversified automotive components company.
- The consolidation aims to expand Gabriel India's product line to include drivetrain components for electric vehicles, Body-in-White and NVH solutions, synchronizer rings, aluminum forgings, and sunroofs, thereby facilitating a broader market reach.
- With the completion of the strategic restructuring, AIPL and other promoters will hold a majority stake in Gabriel India, positioning the company as a key player in advanced automotive technologies and markets, pursuing its goal of becoming a leading player over the next decade. This potential growth is expected to create shareholder value through earnings per share (EPS) accretion and higher returns on equity.
