Mahindra Forgings Limited

Investment date: May 2007; Nov 2007
Percent stake: 3.0%
Type of Investment: Primary and secondary (stock market purchases)
Sector: Automotive
Website: www.mahindraforgings.com

Mahindra Forgings Limited (“MFL”) is among the top 5 forging companies globally, with 300,000 tonnes of forging capacity and 50,000 tonnes of machining capacity across plants in Germany, the UK and India. 

MFL is part of the Mahindra Group, one of the most respected industrial groups in India, and a leader in the Automotive space.  Seeing opportunities in the automotive component sector, Mahindra adopted a buy and build strategy in 2005, acquiring a number of overseas businesses, which in December 2007 were reorganised within Mahindra Forgings Limited, a separately listed Indian company.  In addition to the Indian forging operations the business now comprises:

• Schoneweiss, Germany: one of the top four axle beam manufacturers in the world;
• Jeco Holdings, Germany: a full range provider of forging products; and
• Stokes, UK: specializes in “flashless” parts

Elephant Capital took a stake of 10% in Mahindra Forgings Mauritius Limited in May 2007, when the company comprised the Indian operations and 100% ownership of Schoneweiss.  The reorganisation left Elephant Capital with a position of 1.9% in the new company.  Elephant Capital's position in Mahindra Forgings, increased to 3.9% reflecting the restructuring of the Krammer Loan (see company announcements dated 22 October 2009 and 16 February 2010), but this was reduced to 3.0% following a QIP in February 2010, in which Elephant Capital did not participate.