Transformers and Rectifiers (India) Limited (TARIL) has officially acquired a controlling 51% stake in Posco-Poggenamp Electrical Steel Private Limited (PPESPL), a leading manufacturer of Cold Rolled Grain-Oriented (CRGO) laminations and built-up cores for transformers and reactors. The acquisition was completed through a Share Purchase and Shareholders’ Agreement, marking a significant strategic investment in the electrical steel sector.
Strengthening TARIL’s Market Position
PPESPL, incorporated on December 23, 2010, operates one of India’s largest and most advanced CRGO manufacturing facilities, with an annual installed capacity of 24,000 metric tonnes. The company specializes in producing CRGO laminations and built-up cores for power and distribution transformers up to 765 kV class/500 MVA and has the capability to process up to 1200 kV class/1000 MVA.
CRGO steel is a critical component in transformer production, accounting for nearly 33% of raw material costs. This acquisition will enable TARIL to integrate its CRGO processing requirements, improving efficiency and profitability. The company anticipates an increase of 100 to 150 basis points in EBITDA margins as a direct result of this strategic move. Additionally, the acquisition is expected to generate significant revenue by catering to external customers.
Transaction Details and Agreement Terms
TARIL has acquired 1,37,70,000 equity shares of PPESPL from existing shareholders, securing a controlling interest. The acquisition was executed through a cash transaction, with the deal expected to be fully closed within seven days of signing the agreement.
Under the terms of the agreement, the Board of Directors of PPESPL will consist of five members, with TARIL appointing three directors, including the Managing Director, while the sellers will nominate two directors. The Managing Director will also serve as the Chairman for board meetings and will hold a casting vote on reserved matters.
The appointed directors are as follows:
TARIL’s Nominee Directors:
- Chanchal Singh Satyendra Rajora – Managing Director
- Aakanksha Satyen Mamtora – Director
- Niki Dinesh Ghumra – Director
Sellers’ Nominee Directors:
- Gaurang Nagarsheth – Joint Managing Director
- Gauttam Nagarsheth – Director
Future Prospects
With this acquisition, TARIL strengthens its position as a key player in the power and distribution transformer sector. The move aligns with the company’s long-term strategy to enhance operational efficiency, reduce costs, and expand its market reach.
By integrating CRGO processing capabilities, TARIL aims to secure a competitive advantage in India’s growing transformer manufacturing industry, ensuring better control over critical raw materials and supply chain efficiencies.