Amara Raja Batteries Limited has informed the Exchange about Investor Presentation
September 26, 2022
National Stock Exchange of India Limited “Exchange Plaza” Bandra – Kurla Complex Bandra East Mumbai - 400 051 NSE Symbol: AMARAJABAT
Dear Sir / Madam,
BSE Limited Corporate Relations Department Phiroze Jeejeebhoy Towers Dalal Street, Fort Mumbai - 400 001 BSE SCRIP CODE: 500008
Sub: Outcome of meeting of the Board of Directors of Amara Raja Batteries Limited held on September 26, 2022 - Disclosure under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
In terms of Regulation 30 read with Schedule III of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”) read with SEBI Circular bearing reference number CIR/CFD/CMD/4/2015 dated September 9, 2015, as amended from time to time, we hereby submit the outcome of the meeting of the Board of Directors (“Board”) of Amara Raja Batteries Limited held on September 26, 2022.
The Board, based on the recommendations of the Audit Committee and the Committee of Independent Directors, has considered and approved a Scheme of Arrangement amongst Mangal Industries Limited (“MIL” or the “Demerged Company”) and Amara Raja Batteries Limited (“ARBL” or the “Company” or the “Resulting Company”) and their respective shareholders and creditors (the “Scheme”) under Sections 230 to 232 of the Companies Act, 2013 read with other applicable provisions and the rules, regulations, circulars and notifications issued thereunder (including any statutory modification or re- enactment thereof). (Resulting Company and Demerged Company collectively referred to as “Companies”).
The Scheme, inter-alia, provides for demerger of Plastic Component for Battery Business (“Demerged Undertaking”) (as defined in the Scheme) from the Demerged Company to the Resulting Company (“Demerger”). The Scheme is subject to the fulfilment of certain conditions including receipt of approval of shareholders (majority of public shareholders) and creditors of the Company, approval of other regulatory authorities as may be required, including those of the National Stock Exchange of India Limited, BSE Limited, Securities and Exchange Board of India (“SEBI”) and the Hon’ble jurisdictional National Company Law Tribunal (“NCLT”) and any other authority as may be applicable. Further, the Company has entered into an Implementation Agreement dated 26th September 2022 with MIL and its shareholder inter alia outlining transaction support, relevant representations, warranties and indemnities etc. pertaining to the Demerged Undertaking.
Please find enclosed Annexure 1 containing details as per Regulation 30 of the Listing Regulations read with Circular CIR/CFD/CMD/4/2015 dated September 9, 2015. The Press Release (including Investor Presentation) dated September 26, 2022, is also enclosed herewith as Annexure 2.
The Scheme along with the required documents, as approved by the Board would also be available on the website of the Company i.e. https://www.amararajabatteries.com/Investors/.
We request you to take the same on record.
Thanking You
For Amara Raja Batteries Limited
Vikas Sabharwal Company Secretary
Encl:- As stated above
Disclosure under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI Circular No CIR/CFD/CMD/4/2015 dated September 9, 2015
Annexure – 1
Particulars
Details
Name of the entity (ies) the part forming demerger, details in brief such as size, turnover etc.
of
Resulting Company - Amara Raja Batteries Limited (“ARBL”) (listed on BSE Limited and National Stock Exchange of India Limited)
Demerged Company - Mangal (unlisted)
Industries Limited (“MIL”)
The brief financials for the period ending March 31, 2022, is as under:
Particulars
Turnover – Revenue from Operations (in INR Cr) Net Worth (in INR Cr)
ARBL (Standalone) 8,695.82
MIL (Standalone)*
1,450.33
4,555.17
475.21
*Financial Details of MIL provided above is for the entity as a whole
Brief details of Division to be Demerged
Plastic Component for Battery Business comprising of manufacturing of plastic components for batteries such as containers, jars, covers, small plastic parts, handles etc.
Sr. No. a)
b)
c)
Turnover of the demerged division and as percentage to the total turnover of the the listed immediately preceding financial year / based on financials of last financial year;
entity
the
in
d) Whether
the
transaction would fall within related party transactions? If yes, whether the same is done at “arm’s length”
Not Applicable since this is a case of demerger from an unlisted company into a listed company.
The turnover of the Plastic Component for Battery Business (“Demerged Undertaking”) of the Demerged Company as on March 31, 2022, was INR 569.4 Cr which constitutes ~ 39% of the total turnover of the Demerged Company in the immediately preceding financial year / based on financials of the last financial year (year ended March 31, 2022).
While the transaction shall be considered as a related party transaction under Listing Regulations, in terms of General Circular No. 30/2014 dated July 17, 2014, issued by the Ministry of Corporate Affairs, any transaction arising out of compromises, arrangements and amalgamations under the Companies Act, 2013 ("Act"), does not attract the requirements of seeking separate approval under section 188 of the Act.
The consideration for the Scheme shall be discharged on an “arm’s length” basis. The equity shares to be allotted by the Resulting Company in consideration of the demerger are based on the registered valuers report dated September 26, 2022, issued jointly by Bansi S. Mehta Valuers LLP, Registered Valuer - Securities or Financial Assets (Registered Valuer Registration No. IBBI/RV-E/06/2022/172) and Niranjan Kumar, Registered Valuer - Securities or Financial Assets (Registered Valuer Registration No. IBBI/RV/06/2018/10137) describing, inter alia, the methodologies adopted by the recommended Share Entitlement Ratio (as defined in the Scheme) and setting out the detailed computation of Share Entitlement Ratio for the Scheme.
in arriving at
them
Kotak Mahindra Capital Company Limited, an Independent SEBI registered Category-I Merchant Banker (SEBI Registration No. INM000008704) has provided its opinion on the fairness of Share Entitlement Ratio, as recommended in the Valuation Report.
e)
Area of business of the entity (ies)
ARBL is engaged in the business of manufacturing of energy storage products for both industrial and automotive applications.
f)
Rationale for Demerger
is engaged
MIL in various businesses such as Plastic Component for Battery Business (as defined in the Scheme), manufacturing of auto components (including fasteners, plastics, copper inserts / connectors and others), metal fabrication, storage solution, lead bushes and trading of various products, etc.
The Resulting Company, since its incorporation, has focussed on manufacturing of lead-acid based batteries and had strategically outsourced a few important back-end operations / functions. One such major back-end outsourced operations is manufacturing of plastic components for batteries, including that of plastic containers, jars, covers, small plastic parts, handles etc., to the Demerged Company.
The Demerged Company is engaged in various businesses such as Plastic Component for Battery Business, manufacturing of auto components (including fasteners, plastics, copper inserts / connectors and others), metal fabrication, storage solution, lead bushes and trading of various products, etc. The entire output generated from the Plastic Component for Battery Business is currently sold to the Resulting Company.
As the Resulting Company acquired substantial market share over a period of time in the lead acid-based battery business, the management of the Resulting Company has strategically decided to integrate the Plastic Component for Battery Business
of the Demerged Company, with its core battery manufacturing operations. Accordingly, pursuant to the Scheme, the Plastic Component for Battery Business will be demerged into the Resulting Company and the Demerged Company would continue to run and operate the Retained Business. The Scheme is being proposed with a view to simplify the existing operations between the two companies in order to increase efficiencies.
The implementation of this Scheme will result in the following benefits:
The backward integration is expected to enhance the Resulting Company’s control over the supply and inventory management of its raw materials. This would help with a unified approach on supply chain management and consequent synergies leading to reduced operational, optimization of logistics, supervisory and overhead / utilities costs, reduce duplication of administrative efforts and better procurement policies and prices, for the Resulting Company.
resource utilisation,
The Resulting Company is focussed on its sustainability initiatives and accordingly, is in the process of setting up battery recycling plant. Operations in this new plant are expected to generate plastic scrap which can be used to manufacture new battery containers and covers in the facilities of Demerged Undertaking, thereby stabilising the procurement process and adding further synergies in the combined business.
The proposed demerger is expected to enhance the Resulting Company’s margins and profitability, which would enhance value for all its stakeholders.
focus on
the Retained Business
The management of the Demerged Company intends to increase its i.e., business of manufacturing of auto components (including fasteners, plastics, copper inserts / connectors and others), metal fabrication, storage solution, lead bushes and trading of various products etc. Increased focus would help in improving MIL’s performance metrics leading to better value creation and growth of the Retained Business.
In view of the aforesaid, the Board of Directors of the Demerged Company and the Resulting Company have considered it desirable and expedient to demerge the Demerged Undertaking of the Demerged Company and vest the same with the Resulting Company. Such demerger is expected to be in the best interest of both companies, their respective shareholders, creditors, employees and other stakeholders.
g) Brief details of change in shareholding pattern (if any) of all entities
Based on the shareholding pattern of the Company as on 16th September 2022, the pre and post Scheme shareholding pattern of the Company will be as follows:
Category
Pre-Scheme
Post-Scheme
No. of equity shares
%
4,79,32,452
28.06
No. of equity shares 6,01,45,316
%
32.86
12,28,80,048
71.94
12,28,80,048 67.14
Promoter and Promoter Group Public
Total
17,08,12,500
100.0
18,30,25,364 100.0
There will be no change in the shareholding pattern of the Demerged Company.
There is no cash consideration involved in the Scheme.
In consideration of the transfer and vesting of the Demerged Undertaking of Demerged Company with the Company pursuant to the Scheme, the Company shall issue and allot to each equity shareholder of the Demerged Company, whose name is recorded in the register of members as Member of the Demerged Company as on the Record Date (as defined in the Scheme) as per the following Share Entitlement Ratio:
“65 (Sixty Five) equity shares of ARBL of INR 1/- each, fully paid- up for every 74 (Seventy Four) equity shares of MIL of INR 10/- each, fully paid-up” (“Share Entitlement Ratio”)
h)
of
case
cash In consideration – amount or otherwise share exchange ratio;
i) whether listing would be the resulting for
sought entity.
The equity shares of the Resulting Company are already listed on Stock Exchanges.
The new shares to be issued and allotted by the Resulting Company as consideration under the Scheme shall be listed and admitted to trading on the Stock Exchanges, subject to the Resulting Company obtaining all requisite approvals from the relevant authorities for the same.
Press Release For Immediate dissemination
AMARA RAJA BATTERIES ANNOUNCES BACKWARD INTEGRATION OF ITS BUSINESS
Transaction is expected to improve overall profitability margin
Hyderabad, September 26, 2022:
Amara Raja Batteries Limited (ARBL), India’s leading industrial and automotive battery major (BSE: 500008 & NSE Code: AMARAJABAT), today, announced a proposed transaction integrating its supply chain, leading to margin improvements by bringing the Plastics Component for Battery Business of Mangal Industries Ltd. (MIL) into its own fold through a scheme of arrangement involving demerger of Plastics Component for Battery Business from MIL into ARBL (“Scheme”). The Plastics Component for Battery Business of MIL caters exclusively to ARBL, providing plastic containers, covers, small parts, handles and jars that are used in batteries. It currently has a capacity of 37,000+ MTPA with 150 Injection Moulding Machines located at three manufacturing facilities.
On effectiveness of the Scheme, the shareholders of MIL as on the record date will receive 65 equity shares of ARBL for every 74 equity shares held by them in MIL, as consideration for the Scheme.
This proposed transaction will simplify the business operations by backward integration of the supply chain and bringing plastic moulding capabilities in-house. The Company is expected to benefit from margin improvement and annual recurring post-tax synergies of INR 50 mn to INR 60 mn. The proposed transaction is expected to be EPS accretive from the first year of it being effective.
The Scheme is subject to the necessary statutory and regulatory approvals including approvals of NCLT, the stock exchanges, SEBI and the respective shareholders of each of the companies.
Mr. Jayadev Galla, Chairman & Managing Director of the Company, said “This is in keeping with our theme of consolidating and unlocking synergies as we continue to pursue value accretive growth opportunities that will lead ARBL to the leadership position in the Energy and Mobility space. This step is in alignment with the best interest of our shareholders.”
Harshavardhana Gourineni, Executive Director, Automotive & Industrial Batteries adds “The move strengthens ARBL’s control of the supply chain and augments our battery recycling initiatives. It also helps us in improving margins by better utilization of manpower and reducing logistics costs.”
About Amara Raja Batteries Limited
Amara Raja Batteries Limited is an Energy and Mobility enterprise and one of the largest manufacturers of energy storage products for both industrial and automotive applications in the Indian battery industry. In India, Amara Raja is the preferred supplier to major telecom service providers, Telecom equipment manufacturers, the UPS sector (OEM & Replacement), Indian Railways and to the Power, Oil & Gas, among other industry segments. Amara Raja’s industrial battery brands comprise PowerStack®, AmaronVolt® and Quanta®. The Company is a leading manufacturer of automotive batteries under the brands Amaron® and PowerzoneTM, which are distributed through a large Pan - India sales & service retail network.
The Company supplies automotive batteries under OE relationships to Ashok Leyland, Ford India, Honda, Hyundai, Mahindra & Mahindra, Maruti Suzuki, and Tata Motors. The Company’s Industrial and Automotive Batteries are exported to countries in the Indian Ocean Rim.
Safe Harbor
Some of the statements in this news release that are not historical facts are forward looking statements. These forward looking statements include our financial and growth projections as well as statements concerning our plans, strategies, intentions and beliefs concerning our business and the markets in which we operate. These statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward looking statements. These risks include, but are not limited to, the level of the market demand for our products, the highly competitive market for the types of the products that we offer, market condition that would cause our customers to reduce their spending for our products, our ability to create, acquire and build new businesses and to grow our existing businesses, our ability to attract and retain qualified personnel, currency fluctuations and market conditions in India and elsewhere around the world, and otherwise not specifically mentioned herein but those that are common to industry.
End of Press/Media Release
Investor VA Presentation On Proposed Scheme of Arrangement
September 2022
Disclaimer / Safe Harbor
The contents of this document are for your information only and are intended to provide an overview of the material aspects of the proposed transaction. This document does not purport to provide all and complete details, as may be required to make a full analysis of the proposed transaction. This document does not solicit any action based on the material contained herein and is without regard to any specific objectives, suitability, financial situations and needs of any particular person. This document has not been approved and will not or may not be reviewed by any statutory or regulatory authority or opined on by any legal counsels.
Certain statements in this document concern our future growth prospects, objectives, expectations, estimates, circumstances, and/or results, which are forward-looking statements and involve a number of risks, and uncertainties that could cause our actual results and future growth prospects to differ materially from those contained in such forward-looking statements (whether express or implied). There are risks and uncertainties that could cause actual events to differ materially from these forward looking statements (whether express or implied). These risks include, but are not limited to, risks and uncertainties regarding COVID-19 or other pandemics/epidemics and the effects of government and other measures seeking to contain its spread; risks related to an economic or political wars and sanctions in and around other countries in the world; political instability and regional conflicts ,changes in political, business, regulatory and economic conditions; fluctuations in earnings; the level of the market demand for our products; the highly competitive market for the types of the products that we offer; market condition that would cause our customers to reduce their spending for our products; our ability to create, acquire and build new businesses and to grow our existing businesses; our ability to attract and retain qualified personnel; currency fluctuations; market conditions in India and elsewhere around the world; industry segment concentration; withdrawal or expiration of governmental fiscal incentives; unauthorized use of our intellectual property; and general economic conditions affecting our industry whether specifically mentioned herein or otherwise. If any or a combination of the above risks actually occur, or if any of the risks that are currently not known or deemed to be not relevant or material now actually occur or become material in the future, our business, cash flows, prospects, financial condition and results of operations could suffer, the trading price could decline.
The Company, its affiliates, advisors, representatives, officers or employees cannot, therefore, guarantee that the assumptions underlying such forward-looking statements are free from errors, nor do they accept any responsibility for the future accuracy or actual occurrence of any forward-looking statements contained in this document. The information in this document is as of date mentioned herein and Company or its affiliates, advisors, representatives, officers or employees are not liable to provide any update, in a timely manner or at all. Any opinions expressed in this document are subject to change without notice and neither the Company nor any other person is under any obligation to update or keep current the information contained herein.
Recipients of this document are not to construe its contents, or any prior or subsequent communications from or with Company or its representatives as investment, accounting, legal or tax advice. Recipients of this document should make their own evaluation of the Company, the proposed transaction and of the relevance and adequacy of the information contained herein and should make such other inquiries as they deem necessary.
Company or its promoters, directors, affiliates, advisors, representatives, officers, employees or any other person accept no responsibility or liability whatsoever, whether arising in tort, contract or otherwise, for any errors or omissions in this document or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this document or its contents, and make no representation or warranty, express or implied, for the contents of this document.
This document is not a prospectus or a statement in lieu of a prospectus or an offering circular or an invitation or an advertisement or an offer document under the Companies Act, 2013, together with the rules and regulations made thereunder, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended, or any other applicable laws and regulations.
The distribution of these materials in certain jurisdictions may be restricted by law and persons into whose possession these materials come should inform themselves about and observe any such restrictions. By accessing this document, you confirm you are eligible to receive this information under applicable laws.
By accessing this document, you accept that this document and any claims arising out of the use of the information from this document shall be governed by the laws of India.
No representation or warranty, express or implied, is given by or on behalf of the Company or its affiliates, directors, officers or employees or any other person as so to the accuracy, completeness or verification of the information or the opinions contained in this document and no liability is accepted for any such information or opinions.
2
The Amara Raja Way®
To TRANSFORM our increasing spheres of influence and to
IMPROVE the QUALITY OF LIFE by building institutions that provide
better access to BETTER
OPPORTUNITIES to more people All THE TIME…..
INNOVATION
RESPONSIBILITY
CORE VALUES
EXCELLENCE
EXPERIENCES
ENTREPRENEURSHIP
3
Agenda
Company Profile
Indicative Timelines
02
04
Overview of the Proposed Transaction
Advisors
Future Strategy
06
Annexure
01
03
05
4
Agenda
Company Profile
Overview of the Proposed Transaction
02
04
Indicative Timelines
Advisors
Future Strategy
Annexure
06
01
03
05
5
Amara Raja Batteries Limited
Class & Scale: One of the world’s largest integrated Lead Acid Battery manufacturing facility
w e i v r e v O
► Largest manufacturer of standby VRLA batteries in South Asia
► Amaron – Fastest growing automotive battery brand in India
► Fortune India 500:
― Ranking 195 in the year 2021
― Ranking 208 in the year 2020
► Forbes World’s Best Employers for 2020 – Ranking 316
Extensive Product Portfolio
Products for 4 Wheeler
Products for 2 Wheeler
Products for Standby
Li-Battery Packs for 3 Wheeler
Products Overview
ARBL
8 lead acid battery manufacturing plants
Largest private sector employer in Andhra Pradesh
Strong work force with average age of 31 years
Automotive Batteries
Industrial Batteries
► Leading automotive
► First VRLA Battery
battery brand
Manufacturer in India
► Largest exporter of 4W Batteries in India
► First AGM battery
manufacturer for 2W
► Market Leader in
Telecom
► Largest integrated Facility for MVRLA Batteries
► Pioneered Battery Solutions for Indian Railways
New Energy Business
► First Indian corporate player to establish pilot plant for Li-ion Cell development ► Developed India’s
first 21700 Cylindrical cell
► Made strategic investments into cutting edge technology start-ups in E-mobility space
6
Amara Raja Batteries Limited
Manufacturing Locations
Karakambadi Industrial complex Tirupati ► 1st 4W Battery plant ► 1st 2W Battery plant ► LVRLA Battery plant
Chittoor District of AP
Amara Raja Growth Corridor, Chittoor ► MVRLA Battery Plant ► 2nd and 3rd 4W Battery Plant ► 2nd 2W Battery Plant ► Tubular Battery Plant
Branches
Current Capabilities
4W Batteries ► Annualized capacity: 16.2 mn nos.
2W Batteries ► Annualized capacity: 29.1 mn nos.
Industrial Batteries ► Annualized capacity: 2 bn AH
Tubular Batteries ► Annualized capacity: 1.8 mn nos.
Sales and Distribution Network - India
21
30
400+
30,000+
1,000+
Branches
Warehouses
Amaron Franchisees
Retailers
Power Zone Retail Partners
7
Mangal Industries Limited
Overview
► Engaged in the manufacturing of engineering
components
► Serves a broad range of
sectors
(automotive,
railways, telecom, power, utilities, e-commerce, etc.)
In-house design hub that plays a pivotal role in delivering value- added integrated engineering services for customers
Approach to innovative product designing
► Deep-domain expertise spanning over two decades
EMPATHIZE
DEFINE
IDEATE
PROTOTYPE
TEST
IMPLEMENT
► Caters to customers across industries,
like - ARBL, Ashok Leyland, TVS Motors, Kone, Alstom, Ikea, Royal Enfield, Samsung, Reliance
Awards & Recognitions
► “Best Supplier Award in Quality Category” from
Daesung Electric
► Superior Quality and Outstanding Performance
Award” from Bosch
► The Golden Globe Tigers Award” for Excellence & Leadership in Training & Development by World HRD Congress
► Winners: Best of Platinum/Gold Levels – Non Auto
Sector (Institute of Quality by CII)
Understand
Explore
Materialize
Leverages its superior products and solutions portfolio, design expertise, world-class manufacturing capabilities and the latest quality processes to deliver superior value to the customers
8
Mangal Industries Limited
Plastic Component for Battery Business
► Plastic Containers
► Jars
► Plastic Covers
► Handles
This business of MIL caters solely to ARBL
Storage Solutions
► Pallet
Racking
► Shelving
► Mezzanine
► Automated Storage and Retrieval System
Metal Fabrication
► Cabinets
► C&Z purlins
► Metal doors
► Consumer goods
► Cable trays
► Stamping parts
► High Tensile Fasteners
Auto Components
► Plastics
► Forged components
► Copper Connectors and Inserts
~39% of FY22 Revenue
Trading & Others
► Specialty Chemicals
~61% of FY22 Revenue (Serves ARBL and other third party customers)
9
Agenda
Company Profile
Overview of the Proposed Transaction
02
04
Indicative Timelines
Advisors
Future Strategy
Annexure
06
01
03
05
10
Transaction Overview
Proposed Transaction
Resultant Structure
Promoters
Public
Promoters
Promoters
Public
28.06%
71.94%
100.00%
32.86%
67.14%
ARBL
Issue equity shares as consideration
MIL
Plastic Component for Battery Business
Other businesses
Demerger of Plastic Component for Battery Business
ARBL
Key Steps
◼ Demerger of Plastic Component for Battery Business of the Demerged
Undertaking (MIL) into Amara Raja Batteries Limited (ARBL)
◼ As a consideration, the shareholders of MIL will be issued 65 equity
shares of ARBL for every 74 equity shares held in MIL
11
Key Highlights – Plastic Component for Battery Business
Overview
Products Range
► Started operations in 2004
► Caters solely to Amara Raja Batteries Limited
► Has developed expertise in processing wide range of plastics (PCPP, PC,
Containers
Covers
PC+ ABS, ABS Nylon, POM, etc.)
► Manufacturing capabilities includes automating various operations using centralized conveyor belts and robotics parts handling, among others
Manufacturing Capabilities
Small parts
Handles
Facility
Comprising of
ARGC, Chittoor
► Leasehold
► 36 Injection Molding
land, building, plant & machinery
Machines ranging from 50T to 1000T
Karakambadi, Tirupati
► Freehold land, building, plant & machinery
► 41 Injection Molding
Machines ranging from 50T to 1400T
► Plant &
► 73 Injection Molding
Petamitta*
Machinery
Machines & extruder with a 1080 MT/annum capacity
Jars
Engineering Software
*The Injection Molding Machines of Petamitta plant are being transferred to ARGC and Tirupati manufacturing facilities of Plastic Component for Battery Business
12
Key Highlights – Plastic Component for Battery Business
Journey of Capability Building
Proforma Revenue – Last 3 Financial Years
► OEE (Overall Equipment Effectiveness) improved from 68% in FY10 to
INR cr
89% in FY22
► Yield in FY22 improved to 98%
► Focused customer quality with Defects Rate lower than 100 parts per
million
► Total Employee involvement programs (Quality Control Cells, 5S, Six
Sigma, etc.)
412
421
569
FY20
FY21
FY22
Key Operating Highlights
FY22 – Key Proforma Financials#
150
3
37,000+
1,400+
100%
Net Revenue
EBITDA
EBITDA Margin %
PAT
PAT Margin %
Net Debt
INR Cr
569
98
17.2%
57
10.0%
99
Injection Molding Machines
Manufacturing Facilities
MTPA Capacity
Employees
Plants Certified*
Post Scheme, the profitability margins of ARBL will improve and EPS is expected to be accretive from the first year of its implementation
*ISO 9001:2015, ISO 14001:2015 & TS16949 #The figures are taken from carved out financial statements of the Plastic Component for Battery Business prepared from the a udited financial statements of MIL for FY22. Proforma financial highlights for the Plastic Component for Battery Business has been computed by adjusting one-time items and considering the marginal tax rate of 25.17% and without considering any synergies/ costs on account of the Proposed Transaction
13
Transaction Summary
Transaction Overview
► Demerger of Plastic Component for Battery Business of MIL into ARBL ► MIL - 100% stake held by RN Galla Family Private Limited (RGFPL)
Transaction Rationale
► Backward integration of business ► Potential synergies linked to the proposed transaction ► Expected EPS accretion from the first year itself ► Benefits accruing to shareholders
Swap Ratio
► ARBL will issue and allot 12.21 mn new equity shares to the shareholders of MIL (i.e. 65
equity shares of ARBL for every 74 equity shares held by the shareholders in MIL) ► These shares will be listed on BSE Ltd and National Stock Exchange of India Limited
Key Approvals
Key Events & Indicative Timelines
► Stock Exchanges (NSE and BSE) and Securities and Exchange Board of India (SEBI) ► Shareholders’ approvals (majority of minority) ► National Company Law Tribunal (NCLT) ► Other regulatory approvals, as may be required
► Announcement of Scheme: September 2022 ► Stock exchange and SEBI approval: Q3 FY23 ► NCLT convened meeting of shareholders: Q1 FY24 ► NCLT approval: Q2 FY24 ► Indicative timeline for effecting the Scheme : 12 – 14 months
14
Transaction Rationale
#1
Backward integration of business
► Enhanced control over the supply and inventory management of its raw materials
► Combining of a wider value chain bringing in-house plastic moulding capabilities
► Simplification of the business operations
► Various potential synergies arising from the proposed transaction include
#2
Potential synergies linked to the proposed transaction
‒
‒
‒
optimization of resource utilization
reduced operational and logistics costs
better procurement policies and prices
#3
Potential EPS accretion
#4 Benefits accruing to
shareholders
► Estimated value of the annual recurring potential post tax benefits would range from INR
50 – 60 mn.
► Proposed transaction expected to be EPS accretive from first year of it being effective
► Improvements in margins and profitability of the company
15
Agenda
Company Profile
Overview of the Proposed Transaction
02
04
Indicative Timelines
Advisors
Future Strategy
Annexure
06
01
03
05
16
Indicative Timelines
Months
Sep 2022
Oct
Nov
Dec
Jan 2023
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Board Approval
Filing of scheme with Stock Exchanges
Receipt of Stock Exchanges approval and filing with NCLT
Filing with NCLT
Shareholders / creditors meeting
NCLT / other regulatory process
NCLT Approval
Receipt of NCLT order
Process for filing with ROC
Effective date for Demerger
Process for issuance and Listing of additional shares of ARBL
Listing & Trading of additional shares of ARBL
Implementation of the scheme is expected to take around ~ 12 - 14 months subject to receipt of the requisite approvals
17
Agenda
Company Profile
Overview of the Proposed Transaction
02
04
Indicative Timelines
Advisors
Future Strategy
Annexure
06
01
03
05
18
Advisors
Financial Advisor and Fairness Opinion Provider
Transaction Advisor
Legal Advisor and Legal Due Diligence
Independent Valuers
Financial Due Diligence
19
Agenda
Company Profile
Overview of the Proposed Transaction
02
04
Indicative Timelines
Advisors
Future Strategy
Annexure
06
01
03
05
20
International markets: 35 countries and growing
Building Blocks of Growth
Advanced Technologies
► Offer products / solutions for
EVs & Energy Storage applications
Digital Transformation
► Road map for digital factory ► Invest into digital solutions for better customer experience
New and Emerging Markets
► Introduce EFB/ AGM product range ► Expand international presence
1st subsidiary in UAE
Lead Recycling
► Integrated approach to scrap battery
collection and recycling
SEA Growth market
21
Sustainability and Initiatives for Growth
Integrated Approach to Lead Recycling
Establishing Circular Economy
Cost Saving
Recycling
Compliance Environmental Regulation
Battery Plant
Distribution Centre
Supply Security
Cores Collection Through Reverse Logistics
Smelter
Initiative for Growth
► Leverage OEM relationships by offering future ready solutions ► Accelerate growth by strengthening distribution channel ► Access global markets by leveraging global relationships ► Enhance customer value by innovative business models
► Widen international market reach ► Enhance market access through innovative channel
initiatives
► Reinforce brand strength through enhanced customer
► Technologically advanced EFB and AGM batteries using
experience
Dura-frame
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Agenda
Company Profile
Overview of the Proposed Transaction
02
04
Indicative Timelines
Advisors
Future Strategy
Annexure
06
01
03
05
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Abbreviations
2W
4W
ABS
Two Wheeler Vehicles
Four Wheeler Vehicles
MT
Metric Tonne
MTPA
Metric Tonne Per Annum
Acrylonitrile Butadiene Styrene
MVRLA Medium Value Regulated Lead Acid
AGM
Absorbed Glass Mat
AP
Andhra Pradesh
ARBL
Amara Raja Batteries Limited
ARGC Amara Raja Growth Corridor
BSE
BSE Limited
CAGR Compounded Annual Growth Rate
NCLT
National Company Law Tribunal
NSE
OEE
National Stock Exchange of India Limited
Overall Equipment Effectiveness
OEM
Original Equipment Manufacturer
PC
PCB
Polycarbonates
Plastic Component for Battery
CII
Confederation of Indian Industry
POM
Polyoxymethylene
EBITDA Earnings Before Interest, Tax, Depreciation and Amortization
PPCP
Polypropylene Copolymer
EFB
EPS
EV
GM
Enhanced Flooded Batteries
Earnings Per Share
Electric Vehicles
Gross Margin
ISRO
Indian Space Research Organisation
Li-ion
Lithium Ion
LVRLA
Large Valve Regulated Lead Acid
MIL
Mangal Industries Limited
ROC
Registrar of Companies
ROCE
Return on Capital Employed
SBU
Strategic Business Unit
Scheme Demerger of PCB business from MIL into ARBL
SEA
SEBI
UAE
South East Asia
Securities Exchange Board of India
United Arab Emirates
VRLA
Value Regulated Lead Acid
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