Shares of Lumax Auto Technologies rose nearly 10 percent after the automotive systems and components supplier announced a strategic agreement to acquire a majority stake in Greenfuel Energy Solutions Pvt Ltd from its current shareholders.
At 1.43 PM, shares of Lumax Auto traded 6.7 percent higher at Rs 555. The stock has gained 20 percent in the past six months, outperforming the Nifty 50 which gained 15 percent during the same period.
This acquisition marks Lumax Auto's entry into the rapidly growing segment of green and alternate fuels, including CNG and hydrogen applications. Greenfuel, known for its expertise in high-pressure fuel delivery and storage systems, as well as fire and smoke alarm systems for the automotive industry, supplies major OEMs such as Maruti Suzuki, Tata Motors, and Volvo Eicher Commercial Vehicles.
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The deal will allow Lumax Auto to broaden its product offerings and diversify its solutions for automotive OEMs in India. While Greenfuel's ancillary businesses will be excluded from the acquisition, its core competencies in fuel systems and related technologies will be integrated into Lumax Auto's portfolio.
Deepak Jain, Promoter Director of Lumax Auto said, "This is another step in our long-term growth strategy of strategic partnerships with industry leaders. With the CNG vehicle market expected to witness strong growth, specifically in the passenger vehicle segment, we will look to leverage this platform to deliver high-quality solutions to our customers and be an industry leader for systems and components in the 'alternate fuels' segment."
Greenfuel's day-to-day operations will continue under the leadership of Akshay Kashyap, founder and CEO. He said, "We are excited about this strategic partnership with LATL which merges their extensive market reach and strong customer base with our core competence in alternate fuel systems. The collaboration is expected to unlock tremendous value for both stakeholders and drive innovation in the automotive sector, leading to a shift towards cleaner and more sustainable mobility solutions."
KPMG Corporate Finance and Grant Thornton have served as exclusive advisors to Lumax Auto and Greenfuel, respectively.
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