Auto Sector: From auto sector to railways, SKF India will invest Rs 1400 crore

Auto Sector: SKF India Group, India's leading auto parts manufacturer, has made the historic decision to separate its automobile and industrial businesses. Following this demerger, the company will now operate as two independent entities—SKF India Ltd (Automobile) and SKF India (Industrial) Ltd. Together, the two entities will invest approximately ₹1,460 crore by 2030, aiming to expand capacity and establish new manufacturing units. This move is strategically important for the company and provides investors with an opportunity to invest in two distinct growth stories.

Demerger of Industrial Business: A New Beginning

The demerger of the industrial business has become effective from October 1, 2025, having been approved by the National Company Law Tribunal (NCLT) in Mumbai. The new entity, SKF India (Industrial) Ltd, plans to list on the stock exchanges by November 2025, subject to timely regulatory approvals. Under this demerger scheme, each shareholder of SKF India Ltd will receive one new share of SKF India (Industrial) Ltd.

With this split, the old company will now focus solely on the automobile business, while the new entity will establish its presence in the industrial sector. This presents a unique opportunity for investors, as they will now be able to share in the growth potential of two distinct sectors.

Automobile Business: Focus on Mobility Transformation

SKF India Ltd will now focus on India's rapidly transforming mobility sector. The company will strengthen its presence in areas such as electric vehicles (EVs), hybrid models, the premium segment, last-mile delivery solutions, and advanced safety systems. To this end, the company will invest ₹410-510 crore in Haridwar, Pune, and Bengaluru by 2030.

The primary objective of this investment is to meet the growing demand from automobile manufacturers (OEMs). Additionally, the company will expand its retail and service network to remain a preferred partner in the automobile industry. This strategy is in line with the growing demand for electric and hybrid vehicles in India's automobile sector, driven by government policies and consumer trends.

Industrial Business: Supporting Infrastructure and Energy Transition

The new entity, SKF India (Industrial) Ltd., will focus on growth in the industrial sector. It will expand its expertise in sectors such as manufacturing, railways, renewable energy, cement, mining, and metals, all of which play a key role in India's infrastructure development and energy transition.

To achieve this, the company will invest ₹800-950 crore by 2030, including setting up a new manufacturing unit in Pune by 2028. Additionally, the company will expand its channel network to enhance its reach and influence in the industrial sector.

SKF India's Portfolio: Rotating Shaft Technology at its Core

SKF India's business is based on rotating shaft technology, including bearings, seals, lubrication management, condition monitoring, and related services. These products and services are critical to both the automobile and industrial sectors, and the company's technical expertise makes it a market leader.

Reason for Demerger: Focus and Value Creation

The demerger was initially approved by the company's board in the fourth quarter of FY24. Subsequently, shareholders and regulatory authorities also approved it. The primary objective of the demerger is to make both business units more focused and efficient. This will not only increase operational efficiency but also create greater value for investors.

The separation of the two entities will allow SKF India to better focus on the specific needs of the automobile and industrial sectors. This move will help the company further strengthen its position in India's rapidly growing market.