Chennai, Nov 5 (IANS): Castings and pig iron manufacturers Rs 3,251.36 crore revenue Kirloskar Ferrous Industries Ltd on Friday announced the merger of its subsidiary Indian Seamless Metal Tubes Ltd (ISMT) with itself.

The ISMT is an integrated specialised seamless tube manufacturer in India.

As per the scheme of arrangement and merger, Kirloskar Ferrous will allot 17 fully paid-up equity shares of Rs 5 each, to the shareholders of ISMT for every 100 fully paid-up equity shares of Rs 5 each held by the shareholders (except Kirloskar Ferrous).

Post merger, the promoter's holding in Kirloskar Ferrous will be 48.06 per cent and that of the public will be 51.94 per cent.

According to Kirloskar Ferrous, the appointed date of the proposed scheme is April 1, 2023.

"We acquired ISMT in March 2022, to enter into the seamless tubes market. For KFIL (Kirloskar Ferrous), this was a step towards forward integration and product diversification. On the other hand for ISMT, this was a step towards backward integration. This acquisition has brought us an opportunity to integrate iron ore to seamless tubes. Now taking a step further, we are proposing to integrate the entire business under the umbrella of Kirloskar Ferrous Industries Ltd. to reap the synergies between the two businesses," said Atul Kirloskar, Chairman, Kirloskar Ferrous.

"As we complete two-quarters of the full operations of ISMT post-acquisition, our team has ensured smooth operations and is confident to move ahead in line with our expectations. We believe, the merger will result in a financially robust entity with a broader customer base covering the entire value chain. This will also help us improve operational efficiencies through standardization and simplification of business processes," said R.V.Gumaste, Managing Director.

Meanwhile Kirloskar Ferrous closed the Q2FY23 with an operational revenue of Rs 1,133.5 crore (Q2FY22 Rs.949.9 crore) and a net profit of Rs 82 crore (Rs 83.9 crore).