Oman-India fund invests Rs 100 crore in Divgi Torq

Private equity firm Oman India Joint Investment Fund (OIJIF), backed by the State Bank of India and State General Reserve Fund of Oman, has invested Rs 100 crore in auto component maker Divgi TorqTransfer Systems Pvt. Ltd to fund its capacity expansion and diversification into new product categories, as per Economic Times.

The Pune-based company makes automotive drivetrain systems and components, specialising in four-wheel drive solutions and synchroniser systems. It is banking on emerging growth opportunities for electric and hybrid vehicle systems along with BS VI technology for expansion. 

OIJIF, a mid-market private equity firm, recently announced the second close of its second fund, OIJIF II, with commitments of $230 million. 

According to ET, OIJIF CEO Srinath S said that Divgi-TTS is the first investment made from OIJIF II. The auto industry is undergoing fundamental changes and Divgi-TTS has all the right ingredients such as robust internal control systems and superior technological capabilities to exploit the growth in the sector.  

The auto component maker sees great opportunity in sports utility vehicles or SUVs, a segment which is among the fastest growing in India’s auto sector, thanks to its range of four-wheel drive systems. 

Jiten Divgi, managing director, Divgi TorqTransfer Systems their company is uniquely placed to build a strong Indian Tier 1 brand for product leadership. Oman India will be a highly valued partner that will give us tremendous force multiplication and leverage in realizing this vision of global product leadership.

Two years ago Divgi TorqTransfer Systems accelerated diversification of their products offering with the expanding consumer base. It has since added several new products that find application in the new age electric and hybrid vehicles. In focus is the Dual-Clutch Transmission, India’s first indigenous dual-clutch automatic transmission with compatibility for hybridization, claims the company. 

The company is eyeing opportunity in products designed to boost fuel efficiency and overall vehicle performance as India adopts Euro VI emission and Corporate Average Fuel Efficiency (CAFÉ) norms. 

The company has also come out with eGearDrive gearbox for Battery Electric Vehicles, BEV’s, with its proprietary electronically controlled Park Lock System. 

In a short span, the Company has added leading car manufacturers from nearly all the geographies including the US, Japan, Europe, China, Korea and Russia to its customer base. Divgi-TTS proposes to use the funds for further capacity expansion to cater to the demand from these new products and markets. 

Its customers include leading carmakers from the United States, Japan, Europe, China, South Korea and Russia. That’s why exports account for 50-60% of its revenues. It counts Tata Motors, Mahindra and Mahindra, Ford, Toyota and Nissan among its customers. 

The company also operates a small warehouse in the US. It also exports 12-16 per cent of its sales to South Korea.