A little over a year ago, on 17 March 2025, Sundaram Financial Holdings Ltd—later rechristened TSF Investments Ltd—informed the stock exchange of acquiring the 100% equity ownership of Forge 2000 Pvt Ltd, for a total consideration of ₹16 crore.
TSF is a part of the Trichur Santhanam Family—a sub-family of the TVS—to hold the shares in all non-financial businesses of the group.
A ₹16 crore acquisition in the context of a balance sheet size of ₹5,837 crore (as of 31 March 2025) cannot but raise the curiosity of anyone seeking to look behind the headline!
In the annexure filed to the stock exchange, the object of the acquisition was mentioned as, ‘On completion of the Acquisition, M/s. Forge 2000 Private Limited has become a Wholly Owned Subsidiary of the Company’.
Indeed, a very insightful disclosure of the purpose!
On 10 April 2025, another advice emanated from TSF that it was acquiring a 24.17% stake in Axles India Ltd, from Dana Global for a consideration of ₹182.68 crore.
Axles India was co-promoted by the predecessor company of TSF, Sundaram Finance Ltd, and Eaton Corporation which was later acquired by the Dana group.
Dana held 48.33% in Axles India and disinvested its interest entirely. TSF was acquiring 24.17%. Suspense was maintained on the person acquiring the balance 24.16%!
On 26 April 2025, TSF informed the exchange of completing the acquisition of 24.17% in Axles India.
Like a serialised novel in a weekly magazine that typically ends each chapter with some suspense, awaiting the next issue to unravel, there was little mentioned about who picked up the balance portion!
However, a few days earlier, on 10 April 2025, TSF had initiated a postal ballot process seeking the approval of its members to extend a guarantee for Forge 2000 to borrow up to ₹210 crore.
Like a habitual reader of serialised novels should know to remember different events occurring in different places to guess who could have murdered or burgled, as the case may be, those wishing to track such interesting corporate developments should have the knack of linking events from different places!
With a balance sheet that boasted little substance, Forge 2000 had no muscle to borrow even a cent. Much less, service the interest and the principal repayment of a ₹210 crore loan.
Further, in the explanation to the notice issued by TSF, the object of raising the funds, inter alia, mentioned business expansion of Forge 2000. How accurate this was would become clear only later!
Thus emerged the rationale for the sudden acquisition of Forge 2000, just a few days prior to the Dana disinvestment! A shell vehicle to park the remaining portion of Axles’ shares!
Two questions can pop up in anyone’s mind- (a) Why was a shell company brought into the picture, with no resources of its own? and, (b) Considering that TSF is the group investment vehicle, and has been directly acquiring the shares of other companies as well, like the 4.99% of Impal recently, why did it not buy the entire lot directly?
Post the acquisition of 24.16% by Forge 2000, there was an inter se transfer between it and Wheels India Ltd, another group entity. The revised shareholding in Axles India became TSF, 62.98%; Forge 2000, 21.16% and Wheels India, 12.51%.
TSF made no further public disclosure on this topic. A TSF shareholder may not be aware of what subsequently unfolded.
That development, which did not involve TSF directly, was stumbled upon accidentally and took place a few months later.
But the readers here are better placed - they get it in a single article, in 1,500 words!
On 23 December 2025, Axles India issued a notice that the national company law tribunal (NCLT) had issued an order dated 26 November 2025, to convene a meeting of its shareholders on 27 January 2026, to approve a scheme of amalgamation.
Under that scheme, Axles India is the transferee company. And the transferor company is Forge 2000!
The rationale and the benefits of the said scheme, as provided in the notice, is extracted below. The reader may carefully peruse it to answer a question that is posed later!
The very opening is less than accurate - describing the transferor company and transferee company, as being held by the same group of companies.
The transferor company is a WOS of TSF. The transferee company, alone, is held by different companies of the TSF group. This may be poor drafting, not a bad intent!
While it is not intended to test the memory of the reader, in which part of the rationale does the fact of the 21.16% of shareholding by the transferor in Axles India, feature?
Whatever Forge 2000 was in its original form, it was but a pale shadow in comparison to the acquisition of shares for ₹183 crore and the debt of a humongous amount to go with it. Truly, the hippopotamus in the room glaring one in the face, hardly finding any mention!
The only place where any reference to the transferor company holding the shares of the transferee company occurs is in that part dealing with the extinguishment of such holdings upon the merger.
The next interesting aspect for consideration is the appointed date being 1 April 2025.
It is a given that the concept of ‘appointed date’ is a legal fiction. In this instance, it is more of a detective fiction!
The Dana disinvestment took place either on 26th April or 2nd May. Forge 2000 acquired the shares only at that time. The borrowings also took place around this time or later. The company was a near-empty vessel on the appointed date, with a skeletal balance sheet.
But the law allows any imaginary date for such purposes. Especially if the said date does not spill outside the ongoing financial year. This case is kosher on that aspect. However, there is a curveball that this date presents in this instance!
From 1 April 2025, Axles India is the legal entity that owns all the transactions carried out by Forge 2000.
The big transaction done post the appointed date is the acquisition of the shares of Axles India. Does it not pose a conundrum of Axles India acquiring its own shares, something prohibited in the law unless it is done in a specified manner?
The next bit is the choice of the ‘valuation date’. Did astrology play a part in the choice?
The dates that are available to choose from can be listed as under.
The appointed date – 1 April 2025;
The most recent audited accounts for a full year – 31 March 2025;
The two boards approved the merger - 24th July and 26 July 2025, respectively;
The two entities filed with the petition before NCLT with their unaudited accounts – 30 June 2025;
The valuation report signing date - 25 August 2025;
The proforma accounts certified by the two auditors – 30 September 2025;
The petition to NCLT seeking permission to hold the shareholder meetings was likely done in October or November 2025. The date, however, is not easily identifiable.
KPMG Valuations Services LLP, the registered valuer, managed to zero in on a date that numerologically adds up to ‘7’. The date, plucked out of the thin air, is 2 May 2025!
It is interesting that the valuation report skirts the transferor’s acquisition of the shares of the transferee company and the huge debt assumed to make this possible.
It is not suggested that there is any flaw in the determination of the swap ratio, but the picture surrounding it adds to the thriller effect of this entire transaction!
The article has almost hit the 1,500-word limit!
A fitting end to a typical whodunit type case - How did the directors of Axles India find the scheme to be beneficial, when it merely added a new debt of about ₹150 crore – ₹160 crore, without any addition to its earning capacity? Not to mention, a potential tax tangle where the interest on the loan may hang fire in a tax dispute!
(Ranganathan V is a CA and CS. He has over 45 years of experience in the corporate sector and in consultancy. For 17 years, he worked as Director and Partner in Ernst & Young LLP and three years as a senior advisor post-retirement, handling the task of building the Chennai and Hyderabad practice of E&Y in tax and regulatory space. Currently, he serves as an independent director on the board of four companies.)
