Shares of Samvardhana Motherson International Ltd (SAMIL) experienced a decline on Monday, September 21, 2026, following the announcement that its wholly-owned subsidiary, Samvardhana Motherson Adsys Tech Ltd (SMAST), would acquire a majority stake in Rotary Connectors Pvt Ltd (RCPL).
SAMIL shares fell by 2.34% to a low of Rs 160.55, down from their previous close of Rs 164.40, after the news of the strategic acquisition became public.
Strategic Acquisition in Aerospace and Defence
SMAST is set to acquire a 50.1% stake in RCPL from its current shareholders. The promoters of Rotary Connectors will retain the remaining 49.9% ownership. This transaction, which has an enterprise value of Rs 500.4 crore, will be completed through cash consideration and does not require governmental or regulatory approvals.
Rotary Connectors, incorporated in December 2005, specializes in manufacturing military-grade circular connectors and interconnection solutions. Its products are vital for the aerospace and defence sectors, and the company operates three manufacturing facilities in Bengaluru.
Expanding Market Presence
This acquisition aligns with SAMIL's broader strategy to diversify and scale its aerospace and defence business, particularly in Electrical Wiring Interconnect Systems (EWIS). The company believes its existing market presence, extensive geographic reach, and customer access will significantly accelerate Rotary Connectors' growth.
RCPL has demonstrated consistent financial performance, reporting a turnover of Rs 123.5 crore in fiscal year 2026, an increase from Rs 102.8 crore in FY25 and Rs 75.2 crore in FY24.
Upon completion of the transaction, which is anticipated by the fourth quarter of fiscal year 2027, SMAST will hold a controlling 50.1% equity stake in RCPL and will have the right to appoint a majority of directors to its board, making RCPL an indirect subsidiary of SAMIL.