Sona Comstar to Acquire Railways Equipment Division of Escorts Kubota for INR 1,600 Crore
Sona BLW Precision Forgings Ltd. (Sona Comstar) has entered into an agreement with Escorts Kubota Limited (EKL) to acquire the Railway Equipment Division of EKL (RED) for an enterprise value of INR 1,600 Crore. RED is a leading supplier of critical components for Railways, such as brakes and suspension systems for various rolling stocks. The proposed acquisition is expected to be earnings accretive for Sona Comstar right from the first year and offers significant growth opportunities. RED has over sixty years of experience in the railway component industry and has been a long-term partner of Indian Railways and major private railway OEMs. It is one of the few companies to have multiple products approved by Indian Railways and is the only domestic player of scale in India to have received Silver-grade International Railway Industry Standard (IRIS) certification for brake systems.
Key Highlights
- Sona Comstar to enter the Railways components sector with the acquisition of Escorts Kubota Limited’s Railways Equipment Division for INR 1,600 Crore.
- RED is a leading supplier of critical components for Railways, such as brakes and suspension systems for various rolling stocks.
- RED reported revenue of approx. INR 250 crore and approx. EBIT of INR 179 crore in FY24.
- RED has over sixty years of experience in the railway component industry and has been a long-term partner of Indian Railways and major private railway OEMs.
- RED is the only domestic player of scale in India to have received Silver-grade International Railway Industry Standard (IRIS) certification for brake systems.