Jupiter Wagons: Company acquired for Rs 271 crore, why is the deal very special?

Jupiter Wagons Limited informed the stock market on Wednesday that it has acquired Bonatrans India i.e. BIPL. According to the company, this acquisition has been done for Rs 271 crore. The company has described this step as historic because with this the company became the first rolling stock manufacturer in the country to have its own wheel plant. The company has sent this news to the stock market after the market is closed. In such a situation, the impact of the news on the stock can be seen. The stock closed down 1.6 percent in Wednesday’s trading.

The company informed that BIPL is located in Aurangabad, Maharashtra. And the company is a leader in manufacturing rolling stock wheelsets. The company has the capacity to manufacture 20 thousand wheels and 10 thousand axles annually. The company said that with this acquisition the company’s dependence on exports will reduce and the company will be able to increase its business capacity. Apart from Jupiter Wagons, BIPL’s clients also include many other companies including BEML, Titagarh Rail Systems.

The company has already announced to invest Rs 1000 crore in the next 2 years to further improve its business capabilities. According to the company, these steps will help it in meeting the growing needs of the Railways. Following this acquisition, Europe’s leading wheel manufacturer Bonatrans Group will retain a minority stake in the company.

Earlier on March 7, the company had informed that it has received an increased order of Rs 957 crore from the Railways. The company’s stock is a multibagger stock and the stock has given a return of 250 percent in one year. At the same time, investment in stocks has increased more than 20 times in 3 years.