- 16 Sep 2024
- ICICI Securities
LUMAX AUTO TECHNOLOGIES LIMITED: ACQUIRES MAJORITY STAKE IN GREENFUEL ENERGY SOLUTIONS
News: In a regulatory filing, Lumax Auto Technologies Limited (LATL), has informed the exchanges that it has entered into an agreement to acquire a 60% stake in Greenfuel Energy Solutions Private Limited for ₹ 133 crores (Equity valuation pegged at ~₹ 221 crore). This strategic acquisition marks LATL's foray into green and alternate fuels market, encompassing CNG, hydrogen, and other applications anticipated to experience robust growth in the coming years. Greenfuel is well-regarded for its high-pressure fuel delivery and storage systems tailored for CNG and hydrogen vehicles, as well as its fire and smoke alarm, detection, and suppression systems for the automotive sector.
Views: Greenfuel Energy Solutions serves key OEMs such as Maruti Suzuki, Tata Motors, and Volvo Eicher Commercial Vehicles, and has established strong technology collaborations that enhance its competitive edge. The partnership will enable LATL to broaden its product offerings and diversify solutions for automotive OEMs in India. It will enable LATL to expand their clientele. Also, with OEMs like Maruti (market leader in CNG vehicles) aiming to sell 6 lakh CNG units in FY25, this partnership strengthen will LATL position in the rapidly growing alternate fuels segment. On the valuation standpoint it appears to be a fair transaction at ~1x P/S however we await further financial details before formulating a definitive view on the company.
Impact: Neutral