Stories
Bonfiglioli India Defends Parent Royalties Ahead of IPO
- •Bonfiglioli Transmissions defended its royalty payments and related-party transactions ahead of its 2500-crore IPO.
- •Managing Director Kennady V. Kaippally stated that royalties provide access to vital global technology and R&D capabilities.
- •The effective royalty rate is about 4.4% of revenue, with 35% of 2025 sales coming from products introduced in the prior three years.
- •Imports from group entities have decreased from 15% in 2023 to 11% due to increased local sourcing.
- •EBIT margins improved from 14.5% in 2023 to 18.4% in 2025, driven by localization, operational efficiency, and scale.
Key Questions Answered
Managing Director Kennady V. Kaippally stated that royalty payments and related-party transactions provide access to global technology, international markets, and new products that strengthen the company's competitive position. He noted that these practices deliver significant economic value and help drive improved margins.
The initial public offering of Bonfiglioli Transmissions opens for public subscription on October 15 and closes on October 19, 2026. The issue is an entirely offer for sale (OFS) of 4.32 crore equity shares by the promoter Bonfiglioli S.p.A., meaning the company will not receive any proceeds from the public issue.
Bonfiglioli India's purchases from group entities have declined from 15% of procurement in 2023 to 11% as the company increased its focus on local sourcing whenever commercially viable.
