MM Forgings acquires CAFOMA Autoparts

Auto components maker MM Forgings Ltd (MMF) on Saturday said it has acquired CAFOMA Autoparts for a total consideration of Rs 33 crore.

The deal to acquire CAFOMA, one of the large independent suppliers of machined crankshafts catering to the tractor and industrial segments, includes a sum of Rs 28 crore in cash and Rs 5 crore in debt, the company said in a regulatory filing.

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The acquisition will help the company reach 60,000 machined crankshafts per month, MMF said adding the combined entity is expected to become a full-fledged supplier of machined crankshafts to various sectors including automotive, commercial vehicles, exports, farm equipment, industrial and marine applications.

CAFOMA has a capacity to produce 15,000 crankshafts per month and is presently machining 5,000 crankshafts per month on job work basis, it added.

The company further said it is also enhancing its machining capacity of crankshafts to 25,000 crankshafts per month in South India to establish a significant presence in the region.

MMF said it expects the acquisition to add a potential of Rs 100 crore plus of turnover with the development of new parts and markets.

CAFOMA's plant located at Ranipet has 20,000 sq metre of freehold land and 6,500 sq metre of constructed factory building.

"Of this, 10,000 sq metre of vacant land is available for further expansion," MMF said.

Prior to CAFOMA acquisition, MMF had acquired the crankshaft machining facilities of Clover, an erstwhile company of the Amtek Group, amongst other assets from Clover in May-July 2021. It also took over the crankshaft machining lines of BSN Industries during Jan-March 2020.

The company had in 2018 fully acquired DVS Industries, which in turn bought the crankshaft machining lines of Amul Auto Components, Rudrapur in 2019.

"With all these, over the next few months MMF's capacity of machined crankshafts, will be 60,000 crankshafts per month," it said adding the development would lead it to become one of the top league of integrated crankshaft suppliers in India with in-house forging and machining facility.