Samvardhana Motherson International Limited (Motherson) has approved an investment of up to INR 2 billion in its subsidiary, CIM Tools Private Limited, through the subscription of 9.25% Compulsory Convertible Debentures (CCDs). The investment, which will be executed in one or more tranches, is expected to increase Motherson’s shareholding in CIM Tools from 55% to approximately 68%–74% upon conversion by June 30, 2025.
CIM Tools is engaged in the machining and sub-assembly of components for the aerospace industry. It also owns an 83.02% stake in Aero Treatment Private Limited, which specializes in surface treatment for aerospace components. The company’s consolidated revenue for the financial year 2024 stood at INR 3,038.7 million, with revenue for the first nine months of FY 2024 at INR 2,399.07 million.
The investment aims to support CIM Tools’ growth strategy, which includes expanding capabilities with new facilities for pipes, tubes, and surface treatments. CIM Tools has also recently been recognized as a Tier-1 supplier for Airbus commercial aircraft. The company has reported organic growth, with both revenue and EBITDA approximately doubling between FY 2022 and FY 2024.
The CCDs will be issued at face value and will be converted into equity based on CIM Tools’ financial performance for FY 2025. The transaction, classified as a related party transaction under the Companies Act, 2013, will be conducted on an arm’s length basis. No regulatory approvals are required for the investment.
CIM Tools operates two manufacturing facilities in Bengaluru, with two additional greenfield sites under development in Tumakuru, Karnataka.