Bharat Forge completes exit from REFU Drive joint venture through Kalyani Powertrain

Bharat Forge Ltd has completed the exit of its subsidiary, Kalyani Powertrain Ltd, from REFU Drive GmbH, following the transfer of Kalyani Powertrain’s entire 50 per cent equity stake in the German company to REFU Elektronik GmbH.

Following the share transfer, REFU Drive GmbH has ceased to be a joint venture of Kalyani Powertrain, Bharat Forge said in a filing to BSE and the National Stock Exchange on September 2, 2026.

The development completes the transaction that Bharat Forge had first disclosed on July 23, 2026. The company said disclosures made under the Securities and Exchange Board of India’s Master Circular dated January 30, 2026, in its earlier filing would be amended to reflect completion of the transfer.

Bharat Forge did not disclose the consideration received, the valuation of the stake, the financial impact of the transaction or the rationale for the divestment in its latest exchange filing.

The exit is relevant because Kalyani Powertrain is Bharat Forge’s holding company for its electric two-wheeler business and holds a 64.29 per cent interest in Tork Motors. Bharat Forge has been pursuing electric-mobility opportunities alongside its traditional forging operations, Defence products, axle systems, castings and industrial manufacturing businesses.

However, the electric two-wheeler activity has also been an area of financial pressure. Bharat Forge’s FY2026 annual report had noted an impairment in the electric-bike cash-generating unit during FY2025 amid adverse developments in the two-wheeler electric-vehicle market. Separately, the company recognised a Rs 499.65 crore impairment of its investment in Kalyani Powertrain in FY2026 in its standalone financial statements.

Against this background, the REFU Drive stake sale appears to simplify Kalyani Powertrain’s investment structure, although Bharat Forge has not indicated whether the transaction will result in an accounting gain or loss, cash inflow or any change in its broader electric-mobility plans.

REFU Drive’s removal from the group structure comes as Bharat Forge increasingly directs capital and management attention towards higher-value manufacturing platforms. The company’s stated strategy is to move beyond component manufacturing into systems, machining, assemblies and proprietary products, with a particular focus on defence, Aerospace, industrial applications, castings and automotive axle systems.

In its latest quarterly disclosures, Bharat Forge reported net sales of Rs 4,639.94 crore, up 18.71 per cent year-on-year and 2.47 per cent sequentially. However, profitability was under pressure, with profit after Tax turning to a loss of Rs 78.63 crore against a profit of Rs 287.19 crore a year earlier. Operating margin, measured by PBIDT excluding other income, declined to 15.29 per cent from 17.22 per cent in the corresponding quarter.

Management has attributed recent margin pressure to higher energy, input and Logistics costs, as well as temporary supply-chain and labour disruptions. It has nevertheless maintained that demand in India and the US remains supportive and that defence deliveries are expected to contribute more meaningfully in the second half of FY2027.

The company is also undertaking a planned Rs 1,800 crore organic capital-expenditure programme in India across forging, machining, heat treatment, ring rolling and emerging industrial applications. Its wider investment agenda includes defence energetics, aerospace, Semiconductor equipment and data-centre-linked power systems.

Bharat Forge shares closed at Rs 2,055 on September 1, 2026, near unchanged for the day. The stock has risen 78.14 per cent over the past year, though it remained below its 52-week high of Rs 2,274.

Disclaimer: The article is for informational purposes only and not investment advice.