TVS Group’s Sundaram Clayton embarks on internal rejig to unlock value

Representative image.

Sundaram Clayton, the listed auto component manufacturing arm of the $8.5 billion TVS Group has kickstarted an internal restructuring exercise to unlock value for shareholders and to ensure greater focus on each of the business verticals.

The firm has proposed to reorganise and segregate the businesses of manufacturing non-ferrous gravity and pressure die castings from its other businesses, according to a stock exchange disclosure. According to the Sundaram Clayton website, the firm is a leading supplier of aluminium die castings to the automotive and non-automotive sector.

“As part of the overall restructuring exercise, it is also proposed to consolidate promoter holding entities with the company by way of merger," the announcement added.

“Pursuant to the said consolidation, the promoters of the company will effectively surrender their non-convertible redeemable preference shares held in lieu of the monetary obligations of the promoter companies,” the announcement elaborated.

According to the company, the exercise would efficiently streamline the promoter holding structure, bring diverse trading businesses from the promoter entities into the company and will also reduce the administrative, legal and regulatory responsibilities and consequential costs.

The turnover of the demerged division as on March 31, 2021, was Rs 1,176.91  crore, representing 92.59 percent of the total turnover of the company in the financial year ending March 31, 2021.

Recently, Moneycontrol had reported on a part stake sale by Sundaram Finance Holdings in Sundaram Clayton.