HFCL Limited's board has approved an investment of Rs 89.25 crore in HFCL Advance Systems Private Limited (HASPL), its wholly owned subsidiary, through a share subscription agreement. The investment will be made in two tranches alongside contributions from other investors for a total infusion of Rs 175 crore into HASPL.
Post completion, HASPL will remain a subsidiary of HFCL with HFCL holding 51.02% stake. Other shareholders include ITI Holdings and Investment Private Limited and the HFCL Advance Employees Trust at 14.99% each, Mr Anant Nahata at 6.50%, Mr Sushant Mohan Gupta and Mrs Shubhra Gupta at 4.75% each, and BAS Engineering Private Limited at 3%.
The board has also approved the disinvestment of up to 80% of Raddef Private Limited, a non-material subsidiary, to HASPL for Rs 75 crore. HFCL's thermal weapon sight (TWS) business will be transferred to HASPL on a slump sale basis for Rs 50 crore.
Separately, the HASPL board has approved the acquisition of 100% of HFCL Defence Systems Private Limited (HDSPL) from Defsys Solutions Private Limited for Rs 25 crore. HDSPL will subsequently acquire the aerostructure business of Defsys on a slump sale basis for Rs 25 crore.
The restructuring consolidates aerostructure manufacturing, radar and surveillance systems, and thermal weapon sight solutions under HASPL. The transaction provides access to an export order book of approximately Rs 1,890 crore along with established capabilities and certifications.
A shareholders' agreement has been executed among the parties governing board composition, transfer restrictions, and governance matters in HASPL. The HFCL Group will have the right to nominate four directors while the DMG Group can nominate two directors. The transactions are expected to close within the calendar year 2026.
Disclaimer: This article is based on company filings submitted to the Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE) and is for informational purposes only. It does not constitute investment advice or a recommendation. Investors should conduct their own research and consult a qualified financial advisor before making investment decisions.