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Rights Issue in Motion—Is JTEKT India Recalibrating for a High-Speed Comeback?

Updated: July 15, 2025 18:03

Image Source : ET Auto
JTEKT India Ltd, the leading auto component manufacturer, is preparing itself for a potential Rs 2.50 billion rights issue as part of its strategic capital-raising strategy. The move will be finalized formally in the company's board meeting on July 15, 2025.
 
Key Points:
 
- Rights issue is timed in a manner that current shareholders are provided an opportunity to subscribe to fresh equity shares, typically at a reduced price, in proportion to their current holding.

- Various forms of fund-raising will be explored by the board, but the rights issue is the option of choice pending shareholders' and regulators' consent.

- The move comes at a time when JTEKT seeks to strengthen its financial position and finance future expansion plans.
 
Financial Snapshot:

- In FY25, JTEKT India recorded a total revenue of Rs 2,409 crore, up 6.74% from the previous year.

- Net tax after profit was Rs 75.26 crore, down 29.57% from last year, due to pressures on margins.

- The debt-to-equity ratio of 0.13 is healthy and net worth is Rs 879.88 crore, indicating good fundamentals despite falling profit.
 
Strategic Vision:

- Proceeds from the rights issue will probably be used for the capacity expansion, technology upgradation, and working capital needs.

- JTEKT India serves major OEMs like Maruti Suzuki, Toyota, Tata Motors, and Mahindra, and expanding its footprint in EV components and industrial bearings.

- The rights issue has been viewed by analysts as a welcome step to free up shareholder value and fuel long-term growth.
 
Sources: HDFC Sky, Business Standard, MarketScreener India, Economic Times Markets, JTEKT India Investor Filings

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