Rane Madras buys Hindustan Composites' friction unit for ₹370 cr
The acquisition creates India's largest friction materials platform with combined revenue over ₹1,000 cr, spanning passenger vehicles, two-wheelers, railways, and aftermarket.
— 1 earlier story on Rane (Madras) Ltd. →What's new
- Board approves ₹370 cr slump-sale acquisition of Hindustan Composites' friction business.
- Combined friction revenue to exceed ₹1,000 cr, market leadership across all segments.
- Target's FY26 revenue ₹315 cr, pre-tax profit ₹40 cr; closing by Sept 2026.
Why this matters
At ~12% of market cap, this is Rane's boldest move yet — turning an ancillary player into India's largest friction specialist. With the COMPO brand and two plants, it captures scale and brand equity in a market ripe for consolidation.
What we're watching
- Funding mix: debt or equity? Rane's D/E at 1.13 leaves room but not much.
- Integration of the COMPO brand and two Maharashtra plants by Sept 2026.
- Whether the acquisition lifts Rane's ROE from the current 5.6%.
The full read
Rane (Madras) is writing its biggest cheque yet: ₹370 crore in cash for Hindustan Composites' friction business. The target brings ₹315 crore in revenue and two plants in Maharashtra, plus the 'COMPO' brand. Post-acquisition, Rane's combined friction revenue crosses ₹1,000 crore, making it the outright leader across passenger vehicles, two-wheelers, railways, and aftermarket. For a company with trailing ₹1,048 crore quarterly revenue and a 5.6% ROE, this is a bet that consolidation and brand power will lift margins. At 12% of market cap, the price is material but not reckless. The open question: how Rane funds it. Debt is an option; the D/E of 1.13 leaves room but not much. Closing by September is the first checkpoint.
Questions answered
- What is Rane (Madras) acquiring exactly?
- Rane is buying Hindustan Composites' friction business, which manufactures brake linings, pads, clutch facings, and industrial products from two plants in Maharashtra, along with the COMPO brand.
- How is Rane paying for the deal?
- The entire ₹370 crore will be paid in cash on a slump-sale basis. Rane has not disclosed the funding mix yet.
- What does this mean for Rane's market position?
- The deal makes Rane the market leader across passenger vehicle, two-wheeler, railway, and aftermarket segments, with combined friction revenue exceeding ₹1,000 crore annually.
- How big is this deal relative to Rane?
- The ₹370 crore EV represents about 12% of Rane's market cap of ₹2,878 crore and roughly 7.9% of its consolidated revenue.
- What are the financials of the target?
- Hindustan Composites' friction business reported revenue of ₹315 crore and pre-tax profit of ₹40 crore for the year ended March 2026.
- When will the deal close?
- Completion is expected by September 30, 2026, pending customary conditions.
Rane (Madras) Ltd.
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All notes on RML →- 30 Jun 2026 · 7:31 PM IST Rane Madras buys Hindustan Composites' friction unit for ₹370 cr
- 42d ago Rane (Madras) Q4 call transcript adds nothing new