InvestorQ : Can you tell me about the recent acquisition of the division of Polycab by Hindalco and what are the synergies?
Dilmini Mercia made post

Can you tell me about the recent acquisition of the division of Polycab by Hindalco and what are the synergies?

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Mitali Bhutta answered.
1 month ago
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Hindalco Industries, one of India’s most profitable aluminium companies and part of the Aditya Birla Group, is all set to acquire a 100% stake in Ryker Base Private Limited. This private limited company is a wholly-owned subsidiary of Polycab India Ltd. Polycab is a listed company in the Indian stock markets. The purchase will be based on an enterprise valuation of close to Rs.323 crore, after adequate working capital adjustments.

Ryker Base currently has a 225,000-tonne manufacturing facility for cast and rolled copper wire rods located in Gujarat. Hindalco, on the other hand, operates one of the world’s largest custom copper smelters at Dahej in Gujarat with copper rod capacity of 345,000 tonnes. By acquiring Ryker Base, Hindalco substantially expands its copper rod capacity in order to cater to the growing demand from the electrical and electronics sectors.

Hindalco is betting heavily on copper to play some emerging trends in India like electrification, urbanization, renewable energy and e-mobility. This inorganic capacity expansion is a step in that direction. Hindalco has been trying to position its aluminium product profile more towards value added products and the Ryker deal fits into that. Ryker uses German technology, consumes less energy and is much lower on carbon emissions.

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