Parth Nadpara
NEW DELHI: Bosch Limited’s board of directors, at its meeting held on March 18, approved entering into a joint venture agreement with Tata Autocomp Systems Limited to form a joint venture company (JV) in India.
The formal joint venture agreement was executed on March 23, according to a report in Business Standard.
The JV will be incorporated as a private limited company in India, under a name to be jointly applied by both companies and made available by the Registrar of Companies.
Its primary business will be the manufacture, sale, and after-sales service of e-axles and electric traction motors, with the flexibility to expand into any other products that the JV board may decide upon from time to time.
Both Bosch Limited and Tata Autocomp Systems Limited will each hold 50 per cent of the paid-up share capital of the JV, making it an equal partnership in every sense.
In terms of the division of responsibilities, Bosch will contribute its engineering and development capabilities, drawing on its global EV powertrain expertise, while Tata Autocomp will manage day-to-day operations including procurement and administration, leveraging its strong supply chain presence within the Indian automotive sector.
On the financial structure, the JV will be incorporated with an initial paid-up share capital of Rs 10 lakh, contributed equally by both partners at Rs 5 lakh each.
The total proposed equity share paid-up capital of the JV can scale up to Rs 94 crore, with both companies contributing in equal proportion of 50 per cent each, based on the funding requirements of the business as it grows.
The governance structure of the JV will consist of a six-member board of directors, with each partner nominating three directors, ensuring equal representation and decision-making rights for both Bosch and Tata Autocomp. A five-year lock-in period will be in place from the date of incorporation, during which neither party may transfer its shares to any third party.
Its primary business will be the manufacture, sale, and after-sales service of e-axles and electric traction motors, with the flexibility to expand into any other products that the JV board may decide upon from time to time.
However, transfers to non-competing affiliates will be permitted even during the lock-in period. After the lock-in period expires, any proposed transfer of shares to a competitor will require the prior written consent of the other shareholder — a standard protective mechanism to safeguard both partners’ interests.
Regarding the related party and conflict of interest aspects, the subscription to the share capital of the JV does not fall within the purview of a related party transaction for Bosch Limited at the time of entry.
However, once Bosch subscribes to the JV’s share capital, the JV will become an associate company of Bosch Limited and will thereafter be treated as a related party. No conflict of interest has been identified or arises from the execution of the joint venture agreement. Bosch Limited and Tata Autocomp Systems Limited are independent entities and do not belong to the same promoter group.
In terms of the scale of the two partners, Bosch Limited reported a turnover of Rs 18,087 crore for FY2024-25, making it one of India’s largest auto-component companies.
Tata Autocomp Systems Limited reported a turnover of Rs 3,959 crore for the same period. The company will furnish all requisite disclosures to the stock exchanges upon the formal incorporation of the JV, as required under the Listing Regulations. The filing was signed off by V. Srinivasan, Company Secretary and Compliance Officer of Bosch Limited, on behalf of the company.
