Auto ancillary stock Gabriel India zooms 20%, up 42% in 6 days; here's why

Gabriel board has approved a composite scheme of arrangement which will accelerate profitable growth with better margins, creating substantial shareholder value through EPS accretion and higher RoE.

Gabriel India share price

 

Shares of Gabriel India hit a new high of ₹842.90, zooming 20 per cent on the BSE in Tuesday’s intra-day trade after the company announced strategic restructuring to consolidate business operations and drive future growth and competitiveness.

 

The auto ancillary stock was quoting higher for the sixth straight trading day, surging 42 per cent during the period. In the past six months, it has zoomed 68 per cent, as compared to 6.7 per cent rise in the BSE Sensex.

 

What’s driving Gabriel India stock price today?

 

The board of directors of Gabriel India (Gabriel) has approved a composite scheme of arrangement involving, inter alia, Gabriel, Asia Investments Private Limited (AIPL), and Anchemco India Private Limited (Anchemco).

 

This Scheme will result into vesting of automotive business undertaking of AIPL comprising of business of Anchemco (engaged in manufacturing of brake fluids, radiator coolants, diesel exhaust fluid (DEF) / ad-blue, and PU/ PVC based adhesives) and investments in Dana Anand India Private Limited (Dana), Henkel ANAND India Private Limited (Henkel) and ANAND CY Myutec Automotive Private Limited (ACYM) (Demerged Undertaking) into Gabriel.

 

Gabriel will issue 1,158 equity Shares of ₹1 each for every 1,000 equity shares of ₹10 each held in AIPL to the shareholders of AIPL.

 

The scheme will accelerate profitable growth with better margins, creating substantial shareholder value through EPS accretion and higher return on equity, Gabriel said.

 

This Scheme will consolidate the business of the demerged undertaking of AIPL in automotive components and products like drivetrain products including transmissions for electric vehicles (EVs), Body in White and NVH Products and solutions, brass and steel synchroniser rings, aluminum forgings, brake fluids, radiator coolants and diesel exhaust fluids (DEF) / Ad-Blue for 2W, 3W and 4W vehicles and trucks and PU and PVC based adhesives into Gabriel.

 

This inclusion, together with the recently added sunroof business, will transform Gabriel from a mono-product suspension company into a diversified, technology-driven mobility solutions provider, and reducing the dependency on a single product line by expansion into new segments, geographies, the aftermarket product range, and railways product range, the company said in statement.

 

The management said they see Gabriel as ANAND Group’s vehicle for future growth with its ability to provide a platform to capture the value creation for all its shareholders. At a Group level, the management said they have set a revenue target of ₹50,000 crore by 2030 and see Gabriel leading the way.  Track Stock Market LIVE Updates

About Gabriel India

 

Established in 1961, Gabriel India is the flagship company of the ANAND Group and one of India’s most trusted names in automotive component manufacturing. Gabriel has evolved as a market leader in ride control products, including shock absorbers, struts, and front forks, serving every major automotive segment - two and three-wheelers, passenger cars, commercial vehicles, and railways.

 

As part of its growth strategy, it entered the sunroof systems market through a tie-up with Inalfa Roof Systems B.V., based in the Netherlands, forming Inalfa Gabriel Sunroof Systems (IGSS) to supply premium sunroof systems. Gabriel also acquired assets from Marelli Motherson Auto Suspension Parts Private Limited (MMAS) to strengthen its suspension portfolio.