During Friday’s trading session, the shares of a pioneer in ball bearing manufacturing in India surged nearly 4.3 percent to Rs. 4,632 on BSE, after the company’s Board approved a Scheme of Arrangement for the demerger of its Industrial Business.
With a market cap of Rs. 22,331 crores, at 10:54 a.m., the shares of SKF India Limited were trading in the green at Rs. 4,517, up by around 1.7 percent, as against its previous closing price of Rs. 4,442.6.
What’s the News:
In its meeting on December 26, SKF India’s Board of Directors approved a Scheme of Arrangement between SKF India and SKF India (Industrial) Limited, according to the latest regulatory filings with the stock exchanges.
The Scheme outlines the demerger of SKF India’s Industrial Business into SKF India (Industrial) Limited, a wholly-owned subsidiary of the company.
This Demerged Undertaking or Industrial Business encompasses all the activities, businesses, operations and properties, related to manufacturing, trading, marketing and providing products, solutions, and services within the rolling bearing, seals, rotating shaft services, and lubrication systems, catering to industries such as railways, defence, wind energy, and the metal industry, among others.
The turnover of the Demerged Undertaking for FY24 was ~Rs. 2,897.8 crores, representing 63 percent of the company’s total turnover during that period. SKF Industrial, a wholly owned subsidiary of the company, will undergo significant changes upon the Scheme’s implementation.
Under the Scheme, SKF Industrial will issue and allot 1 fully paid-up equity share of Rs. 10 to the eligible shareholders of the company, based on the Share Entitlement Ratio, without requiring any additional application, action, or process. The equity shares issued by SKF Industrial will be listed on both the stock exchanges, BSE and NSE.
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Financials:
SKF India reported a marginal growth in revenue from operations, experiencing a year-on-year increase of nearly 10.6 percent, rising from Rs. 1,125 crores in Q2 FY24 to Rs. 1,244 crores in Q2 FY25.
Similarly, the company’s net profit increased from Rs. 90 crores to Rs. 94 crores over the same period, representing a slight growth of around 4.4 percent YoY.
Stock Performance:
The stock has delivered negative returns of nearly 2.4 percent in one year, as well as around 31.4 percent returns in the last six months. So far in 2024, the share of SKF India has given negative returns of about 2.5 percent.
About the Company:
SKF India Limited is a pioneer in ball bearing manufacturing in India and a prominent supplier of innovative solutions for rotating equipment within the automotive and industrial sectors.
SKF India Limited is an affiliate of the Sweden-based SKF Group, which was founded in 1907, and started its operations in India in 1923. Its manufacturing facilities are located in Pune, Bangalore & Haridwar.
The company is a leading supplier of products, solutions & services within rolling bearings, seals, mechatronics, and lubrication systems.
Written by Shivani Singh
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