Shareholders Reject Automotive Axles’ Proposed Affiliate Collaboration

Shareholders of Automotive Axles, including public investors, have rejected a proposed Rs 2,500 crore transaction with its affiliate company, Meritor HVS India (MHVSIL), for FY26.

Voting results showed that 79% of institutional and 88% of non-institutional investors opposed the resolution. Proxy advisory firms, including IiAS, criticised the move, stating that distribution should occur directly through Automotive Axles, benefiting all shareholders.

Automotive Axles is a joint venture between the Kalyani Group and Cummins. MHVSIL is a 51:49 JV between Meritor Heavy Vehicle Systems LLC, which is a Cummins firm, and BF Investments, a Kalyani Group company.

One of the main distributors of Automotive Axles’ goods is MHVSIL, a 51:49 joint venture between Meritor and BF Development. Automotive Axles tried to persuade stockholders that the partnership would enhance product development and market share but was unsuccessful.

Raising an objection to the deal, proxy advisory firm IiAS stated, “MHVSIL and Automotive Axles share the same JV partners, but Meritor and Kalyani Group hold a larger stake in MHVSIL than Automotive Axles.”