Sundaram Finance Holdings to raise stake in Italy’s Mind

Sundaram Finance Holdings Limited has planned to invest up to €2 million in its portfolio company Mind S.r.l., Italy, to augment working capital needs and for further growth.

Last year, Sundaram Finance Holdings entered the carbon fibre market and invested ₹23.71 crore to pick up 40.6% stake. With the fresh investment, the stake is expected to go up to 48.9%.

The Italian firm focuses on producing carbon fibre components for the automotive industry in Europe.

Over the last year, SF Holdings consolidated its stake in two portfolio companies — Brakes India and Wheels India — by investing ₹450 crore to buy out the foreign partners. It was an extension of the company’s long-term strategy of consolidating its automotive holdings.

“We continue to use the automotive industry downturn to consolidate our portfolio, investing further into our companies and undertaking business restructuring to unlock synergies in our foundry business,” said director Harsha Viji.

SF Holdings also announced that it has taken steps to consolidate its investment in foundry business by increasing its stake in Flometallic India Pvt. Ltd.

Flometallic has, in turn, filed a scheme of arrangement with the NCLT to merge its operations with those of Brakes India. Along with Dunes Oman, a subsidiary of Brakes India, this merger will create a combined foundry capacity of 1,75,000 tonnes operating out of four locations — Sholingur, Naidupeta, Jagadia and the Sultanate of Oman.

SF Holdings, meanwhile, has a registered 193% increase in its standalone net profit of ₹11 crore for the quarter ended September.

SF Holdings primarily operates as a holding company owning a portfolio of automotive businesses including foundries, wheels, brakes, turbo chargers, axles, and distribution of spare parts. As a result, dividend from portfolio companies forms a substantial part of the financial results.

Driven by a strong recovery in the automobile sector, dividend received from portfolio companies was at ₹29 crore for the half year ended September, exceeding the full-year dividend of ₹14 crore received for FY21.