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CG Power acquires majority stake in GG Tronics for Rs 3.19 billion
Industry News- Jul 26,24
The collaboration will leverage CG Power’s manufacturing, engineering, and project management expertise alongside GGT’s specialised knowledge in railway transport safety and embedded systems, particularly the ‘KAVACH’ train collision avoidance system.
CG Power and Industrial Solutions, part of the Murugappa Group, has announced plans to acquire a 55% stake in Bengaluru-based G G Tronics Pvt Ltd for Rs 3.19 billion. G G Tronics specialises in designing, manufacturing, supplying, and installing electronic safety embedded signalling systems for the railway transportation sector.
In the fiscal year ending March 31, 2024, G G Tronics reported a turnover of Rs 1.05 billion and a profit before tax of Rs 108 million, with a net worth of Rs 550 million.
According to a stock exchange filing, CG Power will acquire the 55% stake through a combination of purchasing equity shares from the promoters and subscribing to compulsorily-convertible preference shares. This includes buying 1,45,622 equity shares (40% of the share capital) from GGT’s founders for Rs 1.73 billion and subscribing to 1,46,37,704 compulsorily-convertible preference shares issued by GGT for Rs 1.46 billion.
This acquisition aligns with CG Power’s strategic goal to expand its railway product portfolio by entering closely related or adjacent areas with growth potential. The deal is expected to create synergies between the companies.
G G Tronics is a development vendor for the train collision avoidance system (TCAS), also known as the automatic train protection system (IRATPS) or ‘KAVACH.’ The company is in the advanced stages of obtaining approval for the latest version (4.0) with LTE compatibility from RDSO, Indian Railways.
The collaboration will leverage CG Power’s manufacturing, engineering, and project management expertise alongside GGT’s specialised knowledge in railway transport safety and embedded systems, particularly the ‘KAVACH’ train collision avoidance system. This partnership will enable CG Power to actively pursue ‘KAVACH’ and other rail safety projects in the electronic signalling sector.
(Source: BusinessLine)
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