Rane (Madras) closes INR 370 crore friction deal

Leaving Hindustan Composites without its main business

Rane (Madras) has completed the INR 370 crore acquisition of Hindustan Composites’ friction business, a transaction that hands the Chennai component maker leadership in brake friction materials and strips the seller of the operation that generated most of its revenue.

The friction business accounted for INR 315.04 crore of turnover and profit before tax of INR 40.29 crore in FY2026, representing 84 percent of Hindustan Composites’ total turnover for the year to 31 March 2026.

The deal was structured as a slump sale, with the business transferred as a going concern for a lump sum consideration on a cash-free, debt-free basis. At INR 370 crore against INR 315.04 crore of revenue, Rane has paid roughly 1.2 times sales, or about nine times profit before tax.

The business transfer agreement was signed on 30 June and was expected to close by 30 September. Completion on 21 August puts the transaction ahead of schedule.

The acquisition brings two manufacturing plants at Paithan and Bhandara in Maharashtra, and the COMPO brand, which covers brake linings, brake pads, brake blocks, clutch facings and industrial friction products across automotive, railway, farm tractor and industrial customers. Rane has said the combined friction business will have annual revenue exceeding INR 1,000 crore, on an existing export business of more than INR 700 crore.

Rane said the acquisition will be accretive to earnings per share from the first year, and that integration into its brake components division will proceed in phases.

Friction materials are consumable components with steady replacement demand, which makes consolidated capacity valuable across both original equipment supply and the aftermarket.

Rane (Madras), part of the Chennai-based Rane Group, supplies steering and suspension systems, brake components, engine components and light metal castings.