ZF Group strengthens financial flexibility by selling shares in Indian subsidiary

The German automotive supplier ZF Group has taken a significant step to strengthen its financial flexibility by selling a 4.32% stake in its Indian subsidiary, ZF Commercial Vehicles Control Systems (CVCS) India, for 10.22 billion rupees (121 million USD). By selling 820,000 shares, which represent 4.3% of the listed Indian subsidiary, the world's third-largest automotive supplier aims to increase liquidity and expand financial leeway for future growth plans. The promoter within the ZF Group, WABCO Asia, executed this sale at an average price of 12,465.19 rupees per share on the National Stock Exchange of India (NSE). Concurrently, Aditya Birla Sun Life Mutual Fund acquired 160,000 shares of ZF CVCS India at an average price of 12,400 rupees per share, equating to a total value of 1.99 billion rupees. Through this sale, WABCO Asia's stake in ZF CVCS India was reduced from 67.49% to 63.17%. In an official statement, ZF Group emphasized that the sale is intended to improve financial flexibility to support future growth. However, the company reaffirmed that the transaction would not impact control over ZF CVCS India, as the long-term strategy is to maintain a solid majority stake in the unit. ZF CVCS India remains an essential part of ZF's global growth strategy, as the company stated. The Friedrichshafen-based company began its operations in the commercial vehicle control systems sector in January 2022, after completing the acquisition of WABCO in 2020. This strategic move is part of ZF's efforts to expand its presence in the Indian market.