By ITTeam CEAT Ltd., a leading Indian tyre manufacturer and the flagship company of RPG Enterprises, has approved an investment of ₹2.57 crore in its wholly-owned subsidiary, Tyresnmore Online (Tyresnmore), through a rights issue.
Investment Details
The investment involves the acquisition of 21,055 equity shares of Tyresnmore, maintaining CEAT’s 100% ownership in the subsidiary. The transaction is expected to be completed on or before January 20, 2025.
About Tyresnmore
Tyresnmore is engaged in the business of selling automotive tyres and accessories, as well as providing services such as installation, fitting, wheel balancing, and wheel alignment. In the fiscal year 2023-24, Tyresnmore reported a turnover of ₹25.63 crore, reflecting its growing presence in the automotive aftermarket service sector.
Strategic Significance
This investment aligns with CEAT’s strategy to strengthen its digital and service-oriented offerings in the tyre industry. By bolstering Tyresnmore’s capabilities, CEAT aims to enhance customer experience through convenient online tyre purchasing and professional installation services, catering to the evolving consumer preferences for digital solutions.
CEAT’s Financial Performance
In the second quarter of the fiscal year 2024-25, CEAT reported a consolidated net profit of ₹121.88 crore, a decline of 41.4% compared to ₹208 crore in the same quarter of the previous year. However, revenue from operations increased by 8.22% year-on-year to ₹3,304.53 crore, indicating robust sales performance despite profitability challenges.
Market Context
The automotive industry is witnessing a significant shift towards digitalization, with consumers increasingly preferring online platforms for purchasing products and services. CEAT’s investment in Tyresnmore is a strategic move to capitalize on this trend, offering integrated online and offline solutions to meet customer demands effectively.
Future Outlook
By reinforcing its subsidiary’s operations, CEAT is positioning itself to capture a larger share of the growing online automotive service market. This initiative is expected to contribute positively to CEAT’s revenue streams and market presence in the coming years, aligning with the company’s broader objectives of innovation and customer-centric growth.
In conclusion, CEAT’s ₹2.57 crore investment in Tyresnmore underscores its commitment to expanding digital capabilities and enhancing customer service offerings in the competitive tyre industry. As the market continues to evolve, such strategic investments are crucial for sustaining growth and maintaining a leading position in the sector.