Rane (Madras) Ltd (RML) has entered into a Business Transfer Agreement with Hindustan Composites Ltd (HCL) to acquire its friction business on a slump-sale basis for an enterprise value of ₹370 crore, according to reports from CNBC TV18. The acquisition was approved by the company's board of directors and covers Hindustan Composites' friction business along with assets, liabilities, contracts, licenses, employees and related operations as a going concern, subject to customary closing conditions and regulatory approvals. The transaction remains subject to customary regulatory approvals and closing conditions, with completion expected by Q1 FY27, as reported by The Economic Times. This represents a major capital allocation for RML, significantly exceeding its typical annual capex, as the company evolves from a steering specialist to a multi-system component supplier.
HCL's friction business reported revenue of ₹315.04 crore and profit before tax of ₹40.29 crore in FY26, as reported by CNBC TV18. The business operates two manufacturing facilities in Paithan and Bhandara, Maharashtra, and has over six decades of experience across automotive, railway, farm tractor, and industrial sectors. Its product portfolio includes brake linings, brake pads, brake blocks, clutch facings, and industrial friction materials, backed by in-house research and development and a pan-India distribution network. The acquisition is expected to be accretive to earnings over the medium term, diversifying revenue by 15-20% into higher-margin friction products, as reported by The Economic Times. In May 2026, RML reported an 8.5% YoY increase in consolidated revenue, driven by strong demand in the steering segment, showcasing its aggressive expansion strategy.
Upon completion of the acquisition, the combined friction materials business will generate revenue of over ₹1,000 crore, establishing RML as the market leader across all major segments, according to CNBC TV18. This transaction builds on RML's existing leadership in the friction business spanning passenger vehicles, two-wheelers, aftermarket and railways, alongside an export business with revenue of over ₹700 crore. The acquisition will also include the 'COMPO' brand, which reinforces Rane's leadership position by expanding its reach across segments, distributors, fleet operators and aftermarket channels. The deal represents vertical consolidation, with RML traditionally strong in mechanical linkages while friction materials offer higher replacement cycles in the aftermarket. The integration is expected to provide retail consumers with improved availability and standardized pricing for brake pads and linings under the Rane brand across its nationwide distribution network.
The transaction is expected to unlock substantial operational synergies through manufacturing scale, an expanded distribution network, and enhanced R&D capabilities, as reported by CNBC TV18. Shares of Rane (Madras) Ltd ended at ₹1,153.15, up by ₹24.65, or 2.18%, on the BSE following the announcement. The acquisition accelerates consolidation by merging a friction specialist with a steering giant, creating better bargaining power against OEMs and a more robust aftermarket distribution network. The deal signals increased M&A activity in the Indian auto-ancillary sector as firms look to build scale ahead of global supply chain shifts. The ₹370 crore acquisition is the cornerstone of RML's 2030 strategy to dominate the safety-critical component market in India, with the company evolving from a component manufacturer into a system solution provider. Harish Lakshman, Chairman of Rane Group, stated that the acquisition leverages Rane's ability to create a market-leading friction solutions platform.
Rane (Madras) is part of the Rane Group, a leading auto components group based in Chennai, according to CNBC TV18. RML is a preferred supplier to major original equipment manufacturers (OEMs) and the aftermarket in India and abroad, manufacturing a range of automotive products including steering and suspension systems, brake components, engine components, and light metal casting components. Its products serve various industry segments including passenger vehicles, commercial vehicles, farm tractors, two-wheelers, three-wheelers, railways, and stationary engines. The company recently completed a greenfield expansion in Mexico to serve North American OEMs, demonstrating its aggressive global expansion strategy. The Indian auto-component industry is currently undergoing structural transformation with Bharat NCAP safety ratings becoming standard, driving demand for high-performance braking and friction materials at an all-time high.
