Synopsis: Rane (Madras) Limited has announced the acquisition of Hindustan Composites Limited’s friction business for an enterprise value of Rs. 370 crore on a slump sale basis. The acquisition is expected to create a Rs. 1,000+ crore friction materials platform, strengthening the company’s leadership across automotive, railway, industrial, and aftermarket segments.
Shares of Rane (Madras) Limited are likely to remain in focus after the company announced that it has entered into a Business Transfer Agreement (BTA) with Hindustan Composites Limited (HCL) to acquire its friction business on a slump sale basis for an enterprise value of Rs. 370 crore. The transaction is subject to customary closing conditions and regulatory approvals and is expected to be completed by September 30, 2026.
Rane (Madras) Limited has a total market capitalization of approximately Rs. 3,455.75 crore. The company’s shares were trading at Rs. 1246.70 apiece on the stock exchange, up 7.86 percent during the session. The stock has gained 16.74 percent over the last five trading sessions, while it has gained 36.71 percent over the last month. The stock touched a 52-week high of Rs. 1254 and a 52-week low of Rs. 608.50.
According to the company’s regulatory filing, Rane (Madras) will acquire the entire friction business of Hindustan Composites as a going concern, including its assets, liabilities, contracts, intellectual property, licenses, employees, and the well-established “COMPO” brand. The acquisition will be executed through a slump sale and involves a cash consideration of Rs. 370 crore on a cash-free, debt-free basis, subject to customary adjustments.
Hindustan Composites’ friction business manufactures a wide range of products, including brake linings, brake pads, brake blocks, clutch facings, roll linings, and other industrial friction materials catering to the automotive, railway, farm equipment, and industrial sectors. The business generated revenue of approximately Rs. 315.04 crore and reported a profit before tax of Rs. 40.29 crore in FY26. It operates two manufacturing facilities in Maharashtra and has an established pan-India distribution network backed by in-house research and development capabilities.
The acquisition significantly strengthens Rane’s presence in the friction materials business. According to the company, the combined friction business is expected to exceed Rs. 1,000 crore in revenue, making Rane one of India’s largest friction solutions providers across passenger vehicles, commercial vehicles, two-wheelers, railways, aftermarket, and export markets. The integration is also expected to generate operational synergies through higher manufacturing scale, an expanded distribution network, stronger aftermarket presence, and enhanced research and development capabilities.
India’s automotive component industry continues to benefit from rising vehicle production, increasing replacement demand in the aftermarket, growing railway modernization, and expanding exports. Demand for high-performance braking and friction products is expected to remain strong as stricter safety regulations, electrification, and higher commercial vehicle activity drive greater adoption of advanced braking solutions.
For investors, the acquisition is strategically significant as it not only expands Rane’s product portfolio but also enhances its scale, strengthens its market leadership, and improves access to new customers and distribution channels. The addition of the COMPO brand and HCL’s established manufacturing capabilities is expected to improve long-term revenue visibility and support margin expansion through operational efficiencies.
Incorporated in 1960, Rane (Madras) Limited is part of the Chennai-based Rane Group and manufactures steering and suspension systems, brake components, engine components, and light metal casting products. The company serves major automotive OEMs and the aftermarket in India and overseas, with products catering to passenger vehicles, commercial vehicles, farm tractors, two-wheelers, three-wheelers, railways, and industrial applications.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of decisions based on this article. Please consult your investment advisor before investing.
