SKF India (500472) Status Update summary

Meeting overview

• NCLT-convened meeting held virtually to consider a scheme of arrangement involving the demerger of the industrial business from the listed entity into a new company, with equity shares to be issued to existing shareholders on a 1:1 basis.

• All regulatory requirements for notice, quorum, and e-voting were met, with participation from statutory and secretarial auditors, scrutinizers, and board members.

• Shareholders could vote via remote e-voting or during the meeting, with results to be published on company and stock exchange websites.

Scheme of arrangement details

• The demerger transfers the industrial business to SKF India Industrial Limited, with shareholders receiving equivalent shares in the new entity.

• The share entitlement ratio was confirmed as fair by an independent merchant banker, and new shares will be listed on BSE and NSE post-approval.

• The rationale is to create two focused, fit-for-purpose companies, enhancing growth and profitability for both automotive and industrial segments.

Shareholder questions and management responses

• Timeline for demerger completion is targeted for Q4 2025, pending NCLT approval; costs are still being finalized.

• Employees will be allocated to the respective new entities, with a commitment to continuity and care.

• CapEx guidance has increased due to capacity expansion and a new industrial factory, reflecting strong demand.

• No immediate plans to further merge group entities in India; future structure simplification may be considered post-demerger.

• Market share has remained steady, with conscious business decisions on profitability and localization; aftermarket growth supported by expanded distribution and ValueEdge program.

• Localization in automotive is at 95%, industrial at ~50%, with plans to increase industrial localization to 70% over three years.

• Cash and assets are being allocated between entities based on logical principles and historical profitability.