Lumax Auto Tech jumps after inking pact to acquire GreenFuel Energy

Greenfuel is a prominent supplier of high-pressure fuel delivery and storage systems for CNG and hydrogen vehicles, as well as fire and smoke alarm, detection and suppression systems for the automotive industry. The company supplies components and sub-systems to major OEMs such as Maruti Suzuki, Tata Motors, and Volvo Eicher Commercial Vehicles, among others. Its turnover was Rs 214 crore in FY24.

The primary objective of this acquisition is to enter in the green and alternative fuels sector, which includes CNG, hydrogen, and other related applications, which is expected to witness strong and accelerated growth in the coming years.

The proposed partnership with Greenfuel offers LATL the opportunity to expand and diversify the range of solutions it provides to automotive OEMs in India. Lumax and Greenfuel's management team will collaborate as strategic partners and leverage their respective competitive strengths to unlock the potential of the business in the coming years and together, strive to position Greenfuel as an industry leader for systems and components in the alternate fuels segment.

Greenfuel's day to day business and operations will continue to be managed by Akshay Kashyap and the existing professional management team which has successfully developed the platform over the years, stated in the exchange filing.

The company will acquire 60% stake for total consideration of Rs 221 crore. The said transaction is expected to be completed by 30 November 2024.

Deepak Jain, Promoter Director of LATL, said, 'This is another step in our long-term growth strategy of strategic partnerships with industry leaders. With the CNG vehicle market expected to witness strong growth, specifically in the passenger vehicle segment, we will look to leverage this platform to deliver high quality solutions to our customers and be an industry leader for systems and components in the 'alternate fuels' segment.'

Anmol Jain, managing director of LATL, 'This partnership will help us diversify our product offerings to key OEMs as well as increase our per vehicle content in the four-wheeler segment. Together with Greenfuel, our goal will be to harness the Business' significant growth potential by unlocking synergies across customers, technologies and manufacturing excellence.'

Akshay Kashyap, founder and CEO of Greenfuel said, 'We are excited about this strategic partnership with LATL which merges their extensive market reach and strong customer base with our core competence in alternate fuel systems. The collaboration is expected to unlock tremendous value for both stakeholders and drive innovation in the automotive sector, leading to a shift towards cleaner and more sustainable mobility solutions.'

Lumax Industries is one of the leading players in the domestic automotive lighting industry with a product portfolio of automotive lighting systems such as headlamps, tail lamps, other sundry and auxiliary lamps. The company's presence spans all segments of the auto sector, viz., PVs, 2Ws, CVs, buses, tractors, etc.

The company's consolidated net profit surged 47.8% to Rs 34.18 crore in Q1 FY25 as against 23.12 crore posted in Q1 FY24. Revenue from operations jumped 23.8% YoY to Rs 765.79 in the quarter ended 30 June 2024.