Bharat Forge To Invest Over Rs 345 Crore In German Subsidiary

Bharat Forge Ltd. on Tuesday said that it will be investing 39 million euros in its wholly owned subsidiary Bharat Forge Global Holding GmbH.

This follows the metal forging company’s investment committee, at its meeting held on Dec. 24, 2024, approving an infusion of about Rs 345.58 crore into BFGH, according to the company’s exchange filing.

While it expects the investment to be completed by Dec. 31, 2024, Bharat Forge stated in the filing that it had acquired the requisite government and regulatory approvals.

Germany-based BFGH, which was incorporated on Dec. 15, 2003, is the holding company for overseas investments undertaken by Bharat Forge.

While the German subsidiary’s turnover was 5.11 million euros in the period between Jan. 2023 and Dec. 2023, as a holding company, BFGH has investments across its German, Swedish, and French subsidiaries.

Even as the parent company acknowledged that the proposed investment is in the nature of related party transactions, it assured that the funding will be done on an arm’s length basis, according to the filing.

It added that Bharat Forge's Vice-Chairman Amit Kalyani, Executive Director Subodh Tandale, and Independent Director Dipak Mane were also on the advisory board of BFGH.

However, the filing also added that “other than this, none of the company’s promoter/promoter group/group companies have any interest in the proposed investment.”.

According to Bharat Forge, the funding will help BFGH and its subsidiaries repay or prepay “certain outstanding borrowings.”.

At the same time, the filing added that the investment was part of the use of proceeds specified in the placement document dated Dec. 9, 2024, relating to the company’s QIP.

Following the deal, nothing changes, and the automotive, defence, energy, and construction components maker said that it will continue to hold 100% stake in BFGH.

In addition to the above investment, in November, the company had intimated via an exchange filing that it will also be investing Rs 5,447 crore in Bharat Forge America Inc. and Rs 2,075 crore in Kalyani Powertrain Ltd.

Shares of Bharat Forge Ltd. closed 1.88% higher at Rs 1,322.90 apiece on the BSE, compared to a 0.09% decline in the benchmark Sensex.