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News: In a regulatory exchange filing, Gabriel informed about acquisition of 10,000 share of Rs 10 each of Inalfa Gabriel Sunroof Systems Pvt Ltd (IGSSPL) for Rs 1 lakh from its parent Asia Investments Private Ltd. Subsequently, it plans to enter into a JV with Inalfa Roof Systems Group BV (Netherlands based entity) in which Inalfa to hold 51% stake while Gabriel India to hold 49% stake. Media reports indicate total capex for a new plant in Chennai pegged at ~ Rs 170 crore with capacity to manufacture 2 lakh sunroofs per annum and shall be operational by Q1CY24.
Views: We believe this transaction was done with the intent to tap opportunities presented by premiumisation in the PV space and will aid the company in increasing its overall exposure to PV space, which currently is ~22% as of 9MFY23. Since the entity is yet to start operations and stake buy from parent is executed at face value, financially the transaction seems to be fair. Further, we would await management commentary with respect to growth in this particular division.
Impact: Neutral