Japanese company Topy Industries Ltd (Topy) has agreed to buy a 26 per cent stake in WIL Car Wheels Ltd (WCWL), a wholly owned subsidiary of wheels manufacturer Wheels India Ltd (WIL) for an undisclosed amount, as per a stock market disclosure.
The deal is subject to regulatory approvals and is expected to close in a few months.
WIL, part of the TVS Group, set up WCWL to carry out the passenger car steel wheel business in the country.
As per the agreement, the company will transfer its entire passenger car steel wheel business carried out at its plants in Padi, Chennai and Bawal, Haryana on a slump sale basis, to the new company, it said in the BSE filing.
Following the transaction, WCWL will have a leadership position in the passenger car steel wheels segment.
Wheels India currently holds 43 per cent market share in the passenger car steel wheels category.
For Topi, the partnership will help expand its global footprint. The Japanese-headquartered firm is a leading manufacturer of steel wheels for cars, trucks, construction and mining equipment among other products. It has its manufacturing facilities in Japan, US, China and Mexico.
The passenger car steel wheels business of Wheels India had a turnover of Rs 224.30 crore in FY 2017 and Wheels India reported a turnover of Rs 2,176.06 crore during the same period.
Shares of Wheel India closed at Rs 1314.55 each, up 2.70 per cent on BSE in a weak Mumbai market on Friday.