Bain Capital, a worldwide private investment firm, has proposed to acquire significant minority stake in Dhoot Transmission Private Limited (DTPL) and its affiliate, Dhoot Holdings Private Limited (DHPL).
The investment is being made through the Mauritius-based investment arms of Bain Capital, BC Asia Investments XV Limited and BC Asia Investments XVI Limited.
The transaction, classified as ‘Proposed Merger’, has been formally notified to the Competition Commission of India (CCI) under the Competition Act, 2002.
Established in 1999, Dhoot Transmission Group is a number one provider of Wire Harness Solutions for Two Wheelers and Three Wheelers. It is also a number one manufacturer of automotive electrical and electronic components and supplies wiring harnesses, automotive switches, electronic sensors and controllers to original equipment manufacturers (OEMs) in the automotive, medical device and consumer durables industries.
Its subsidiary, DHPL, deals in similar components, which further strengthens its market position.
Bain Capital, a worldwide private equity powerhouse, made the move through its family of investment funds which have experience investing in the technology, healthcare, retail, financial services and industrials sectors.
While the investment firm’s activities do circuitously overlap with Dhoot Transmission, there is “apparent and negligible overlap” for a few of its affiliates, suggesting a low likelihood of adversarial competition concerns in India.
Market implications and competitive landscape
The acquisition signals growing investor interest in India’s auto components sector, a key supplier to the country’s booming auto industry. Analysts consider Bain Capital’s entry into this segment could drive technological innovation, efficiency improvements and international expansion of Dhoot Transmission.
The transaction is currently undergoing regulatory review by the CCI. Although there was no horizontal overlap between Bain Capital’s and Dhoot Transmission’s businesses, certain hypothetical vertical connections between Bain Capital’s affiliates and Dhoot Transmission’s businesses may require further evaluation.
Looking Ahead If approved, the transaction could speed up Dhoot Transmission’s growth strategy by leveraging Bain Capital’s global expertise and financial strength.
Economy watchers say that because the Indian auto market rebounds post-pandemic and growing demand for advanced electrical components, the deal enables each entities to leverage emerging opportunities in the automotive supply chain.
This marks Bain’s second investment in the Indian auto parts maker in the last six months. In September 2024, he invested in RSB Transmission.