Lumax Auto shares zoom on plans to acquire 75% stake in IAC International

Shares of Lumax Auto Technologies were trading almost 6 percent higher in the afternoon trade as investors cheered the company’s plan to acquire a 75 percent stake in interior systems and component supplier IAC International.

IACNA Mauritius Ltd will sell the stake to Lumax Auto for Rs 587 crore, with the deal expected to be completed by March 2023. The remaining 25 percent stake will be held by IAC Global.

At 12.40 pm, Lumax Auto Technologies was trading at Rs 258.60, up 5.66 percent, on the National Stock Exchange. The stock also tested an intraday high of Rs 260.90 earlier in the day.

The sharp gains in the stock were also supported by strong volumes that were significantly higher than the one-month daily traded average volumes.

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IAC International, a debt-free company, posted a revenue of Rs 470 crore in the first three quarters of the current financial year, up 70 percent on year. The company’s acquisition will be financed through 80 percent debt and 20 percent internal accruals.

In an interview to CNBC-TV18, Anmol Jain, Joint Managing Director, Lumax Auto, said, “The acquisition of IAC International Automotive allows us to move up the value chain. We can achieve a consolidated revenue of Rs 3,500 crore with 13 percent EBITDA margin in FY25.”

The company plans to double its aftermarket revenue in three years and it also doesn’t anticipate an increase in capital expenditure, he said