As per Lumax Auto Technologies, it has inked a contract with the International Automotive Components Group to buy a majority stake in IAC International Automotive India for Rs 587 crore. According to a press release from the company, IAC will continue to own a 25% stake in the SPV (acquisition vehicle) that will purchase 75% of the stake for Rs 440 crore, which will be paid in cash and backed by debt and internal accruals.

The company noted that the loan will be repaid in the following five years because to the robust free cash flow creation from IAC India and Lumax Auto Technologies Ltd (LATL).

The company will be able to offer a wider choice of products to clients and grow its current four-wheeler automotive plastics business with the aid of this strategic alliance.

Lumax Auto Technologies is a tier-1 supplier of automotive systems and components and a member of the Lumax-DK Jain Group.

IAC India is a major provider of interior systems and parts to Indian automakers.

IAC India has five manufacturing facilities, including an engineering centre in Pune that specialises in product designing and engineering, dimensional engineering, product development, programme management, and tooling development. The other three manufacturing facilities are located in Manesar, Nashik, and Bengaluru.

The company announced that its current qualified management team would continue to oversee the day-to-day operations and business of IAC India.

"This is a marquee milestone in our long-term growth goals of strategic partnerships with global industry leaders. With our group's existing expertise in automotive lighting and plastics, it provides the opportunity to combine competitive strengths across automotive lighting, plastics and interiors to provide complete solutions to our customers," Deepak Jain, Chairman and Managing director of Lumax, said.

The IAC Group, which has 45 manufacturing plants spread across 17 nations, is a strategic provider of powertrain-independent interior and exterior automobile systems and components to top automotive Manufacturers worldwide.

"Together with Lumax, the IAC India business can be propelled upwards in the coming years. This partnership will offer an immense opportunity to expand our business in India and continue to deliver quality solutions to our customers," David Prystash, Chief Executive Officer of IAC Group, said.

"Together with IAC, our goal will be to take this business to the next level by unlocking synergies across products, customers, technologies and manufacturing excellence," Anmol Jain, Managing Director of Lumax, said.