Shares of Lumax Auto Technologies soared 12% to Rs 248.20 in intraday trade on Monday after the company signed an agreement to acquire a majority stake in IAC International Automotive India Private Limited (IAC India) from International Automotive Components (75%) group (IAC Group) is approximately Rs 587 crore.

The 75% stake in IAC India to be acquired will be fully diluted in cash consideration through the SPV (acquisition vehicle) and will be funded by internal accruals and external debt.

Lumax Auto said: “Lumax and IAC will serve as strategic partners leveraging their respective competitive strengths to drive IAC India’s business forward in the coming years and strive to unlock potential synergies between products, customers, technology and manufacturing excellence.”

Lumax Auto Technologies is a leading Tier 1 automotive systems and components supplier. IAC Group, on the other hand, is the world’s leading supplier of automotive interior and exterior systems and components, including instrument panels, cockpits and consoles, door and trim systems, headliners and overhead systems and other interior and exterior components.

With over $3 billion in global revenues, IAC Group is a strategic supplier to the world’s leading automotive OEMs, with 45 manufacturing facilities in 17 countries.

IAC India is an established Tier 1 interior systems and components supplier to major Indian automotive OEMs, including Mahindra, Maruti Suzuki, Volkswagen and Volvo Eicher Commercial Vehicles, among others. IAC India recorded revenue of Rs 481 crore for the year ended FY22 and Rs 470 crore for the first nine months (April-Dec) of FY23.

Regarding the acquisition target, Lumax Auto stated that the partnership would provide an opportunity for an industry leader in lighting and interior systems to provide integrated solutions and meet the rapid technological advancements in the automotive industry.

“As the industry evolves towards higher value-added and niche content in interior systems, we will seek to leverage the platform to provide our customers with industry-leading solutions and increase the value of our kit per vehicle,” the company said.