Srikalahasthi Pipes Ltd. (SPL), a leading maker of ductile iron (DI) pipes, will amalgamate with its parent Electrosteel Castings Ltd. (ECL).
The date for amalgamation is October 1, according to SPL.As per the proposal, SPL shareholders will receive 59 equity shares of ECL for every 10 equity shares held in SPL. The firms’ boards met on Monday to consider the proposal. The merged entity will have a DI pipe-manufacturing capacity of 8 lakh tonnes with a market share of 30%, said SPL.
The objective is to simplify the group structure with one listed entity for a certain category of business, as per SPL.
According to SPL’s annual report for 2019-20, DI Pipes accounted for 84.2% of its annual turnover, while for ECL, DI pipes and cast iron pipes accounted for 77.83% and ductile iron pipe fittings 8.26%.
Electrosteel is the manufacturer and exporter of DI Pipes and fittings having its facilities in Khardah, Haldia and Bansberia in West Bengal and Elavur in Tamil Nadu, while SPL in Srikalahasti in Andhra Pradesh. ECL ended the last fiscal with a turnover of ₹2,480 crore and SPL ₹1,663 crore.