Rane (Madras) completes Hindustan Composites deal 2026

Deal closure: acquisition effective August 20, 2026

Rane (Madras) Limited has completed the acquisition of the Friction Business of Hindustan Composites Limited, with effect from August 20, 2026. The transaction was executed through a Business Transfer Agreement (BTA) that was signed on June 30, 2026. Rane (Madras) has said the acquisition is expected to be earnings per share accretive from year one onwards. The business is being acquired via a slump sale structure, meaning the undertaking is transferred as a going concern. The consideration for the transaction is ₹370 crore, stated as a lump sum cash amount, subject to transaction adjustments as per the BTA.

Transaction structure: slump sale for ₹370 crore

Hindustan Composites agreed to sell its Friction Business Undertaking to Rane (Madras) for ₹370 crore as a lump sum cash consideration. As disclosed, the transfer includes assets, liabilities, contracts, and licenses connected with the friction materials business. The transaction also includes the COMPO brand and two plants. Hindustan Composites is engaged in manufacturing and marketing fibre-based friction materials such as brake liners, roll lining, brake blocks, and clutch facings.

Board decision and definitive agreement signed on June 30

Hindustan Composites’ Board approved the slump sale on June 30, 2026. On the same date, the company entered into the Business Transfer Agreement to divest the friction business undertaking to Rane (Madras). Separately, disclosures also described the deal as being subject to customary regulatory approvals and completion conditions. One communication stated the transaction was scheduled to close on or before September 30, 2026, subject to meeting closing conditions, while the latest update confirms completion effective August 20, 2026.

Shareholder approval: postal ballot timeline and outcome

Shareholders of Hindustan Composites approved the slump sale through a special resolution that was passed on August 11, 2026. This followed a postal ballot process that concluded on August 8, 2026. Remote e-voting commenced on July 10, 2026 at 9:00 A.M. IST and concluded on August 8, 2026 at 5:00 P.M. IST, with NSDL engaged to facilitate remote e-voting. The company had set June 30, 2026 as the cut-off date for determining eligible members for voting. The approval was described as receiving near-unanimous support from participating shareholders.

Senior management transfers to Rane effective August 20

Pursuant to the agreement, four Senior Management Personnel were transferred to Rane effective August 20, 2026. The individuals named were:

• Nakuleshwar Chatterjee, Senior Vice President - Sales
• Vimal Kiritkumar Desai, General Manager - Purchase
• G. M. Indapawar, Senior Vice President - Works
• T.N. Venkatramani, Vice President - R & D

These transfers align with the business moving as a going concern, where leadership and functional continuity can be important for operating stability.

Leadership change at Hindustan Composites: MD resignation linked to transfer

Pawan Kumar Choudhary resigned as Managing Director and Key Managerial Personnel of Hindustan Composites to facilitate his transfer to Rane. His resignation took effect at the close of business hours on August 20, 2026. Hindustan Composites also stated that Choudhary continues to serve as a Non-Executive Director of the company. Following his cessation as KMP, he also ceases to be the authorised person for determining materiality of events and making disclosures to stock exchanges under Regulation 30(5) of the Listing Regulations.

Financial context: Q1FY27 profit and discontinued operations classification

Hindustan Composites reported a consolidated profit after tax (PAT) of ₹8.68 crore for the quarter ended June 30, 2026, up 16% year-on-year from ₹7.46 crore in Q1FY26. The company attributed the performance primarily to strong results in its friction business. After the proposed slump sale, the friction business was classified as discontinued operations in the financial statements, with comparative periods restated accordingly. The proposed transfer of the Friction Business Undertaking to Rane (Madras) was highlighted as a material development in filings.

Governance update: secretarial auditor resignation during the period

Separately, M/s. MR & Associates resigned as the secretarial auditor of Hindustan Composites effective July 10, 2026. The firm cited logistical challenges arising from the distance between its office in Kolkata and the company’s registered office in Mumbai. The resignation was communicated to stock exchanges on July 10, 2026 at 11:52 a.m. The firm had been appointed for a term of five consecutive years starting from FY26, and the resignation letter was signed by Cs Mohan Ram Goenka, Partner at MR & Associates.

Advisors and disclosures around the transaction

Khaitan & Co advised Hindustan Composites on the sale of its friction business by way of slump sale to Rane (Madras) for a total consideration of ₹370 crore. Disclosures around the deal also referenced regulatory requirements under Section 180(1)(a) of the Companies Act, 2013 and Regulation 37A of the SEBI Listing Regulations in the context of approvals and process.

Key facts at a glance

Market impact and why the deal matters

The transaction represents a significant business change for Hindustan Composites, with its friction business shifting into discontinued operations ahead of completion and the proceeds set at ₹370 crore. For Rane (Madras), the company has positioned the acquisition as EPS accretive from the first year, signalling that the acquired unit is expected to add to earnings without a prolonged ramp-up period. Market commentary around the announcement included a reference to Rane (Madras) shares jumping after a $19-million deal for the Hindustan Composites unit, though no percentage move was provided in the information available.

Conclusion

Rane (Madras) has now completed the acquisition of Hindustan Composites’ friction business effective August 20, 2026, following board approval on June 30 and shareholder clearance via postal ballot on August 11. Alongside the business transfer, senior management moved to Rane and Hindustan Composites recorded key leadership and disclosure-authorisation changes. Investors will track subsequent statutory filings and any further disclosures connected with post-completion adjustments under the Business Transfer Agreement.