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COMPETITION COMMISSION OF INDIA
Combination Registration No. C-2023/12/1089
6th March 2024
Notice under Section 6(2) of the Competition Act, 2002 jointly given by Raymond
Limited, JK Files & Engineering Limited, Ring Plus Aqua Limited, Maini Precision
Products Limited, Kmaini Motorsport India Limited, Mr. Gautam Maini, Mr. Sandeep
Kumar Maini, Mr. Chetan Kumar Maini, and JKFEL Tools and Technologies Limited.
CORAM:
Ms. Ravneet Kaur
Chairperson
Mr. Anil Agrawal
Member
Ms. Sweta Kakkad
Member
Mr. Deepak Anurag
Member
Order under Section 31(1) of the Competition Act, 2002
1. On 12th December 2023, the Competition Commission of India (Commission) received a
notice (Notice), under Section 6(2) of the Competition Act, 2002 (Act), jointly given by
Raymond Limited (RL), JK Files & Engineering Limited (JK Files), Ring Plus Aqua
Limited (RPAL), Maini Precision Products Limited (MPPL), Kmaini Motorsport India
Limited (KMIPL), Mr. Gautam Maini, Mr. Sandeep Kumar Maini, Mr. Chetan Kumar
Maini. Later on, JKFEL Tools and Technologies Limited (NewCo) also became the
notifying party to the Notice. Hereinafter, Mr. Gautam Maini, Mr. Sandeep Kumar Maini,
and Mr. Chetan Kumar Maini are collectively referred to as the Maini Promoters.
Combination Registration Number: C-2023/12/1089
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2. The Notice was given pursuant to the execution of Share Purchase Agreement executed
amongst Mr. Vippen Sareen, KMIPL, and MPPL on 24th November 2023; Share Purchase
Agreement executed amongst One-Up Financial Consultants Private Limited (OFC),
KMIPL, and MPPL on 16th November 2023; Share Purchase Agreement executed amongst
MPPL, the Maini Promoters, Maini Family Trust (MFT), KMIPL and RPAL on 3rd
November 2023; Share Purchase Agreement executed amongst MPPL, Paragon Partners
Growth Fund-I (PPGF), Mr. Amit Giriraj Mohatta, and RPAL on 3rd November 2023;
Shareholders Agreement executed amongst MPPL, KMIPL, the Maini Promoters, RPAL
and JK Files on 3rd November 2023. Further, Share Purchase Agreement amongst Mr. Arun
Rajagopalan, KMIPL, and MPPL dated 16th February 2024; and Share Purchase Agreement
amongst Brioso & Co Pty Limited, KMIPL, and MPPL dated 19th February 2024 have also
been executed.
3. The Commission vide its communications dated 21st December 2023, 17th January 2024 and
2nd February 2024 issued under Regulation 14 of the Competition Commission of India
(Procedure in regard to the transaction of business relating to combinations) Regulations,
2011 (Combination Regulations), required the notifying parties to remove the defect from
the Notice and furnish certain information relevant for the purpose of assessment of the
proposed combination. The notifying parties furnished their responses vide submissions
dated 5th January 2024, 23rd January 2024 and 8th February 2024. The notifying parties also
made submissions dated 15th January 2024, 12th February 2024, 13th February 2024, and
23rd February 2024.
4. The Proposed Combination envisages the following:
(i)
Acquisition of 3.88% shareholding of MPPL by KMIPL from the four existing
shareholders of MPPL viz., Vippen Sareen, Arun Rajagopal, OFC, and Brioso.
Further, all the compulsorily convertible cumulative preference shares issued by
MPPL shall be converted into its equity shares;
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(ii)
Acquisition of 59.25% shareholding of MPPL by RPAL from the seven existing
shareholders of MPPL viz., the Maini Promoters, MFT, KMIPL, PPGF, and Amit
Giriraj Mohatta;
(iii)
Demerger of the following business and shareholdings into the NewCo:
-
the engineering business of JK Files;
-
the entire shareholding of JK Files in JK Talabot Limited (JKTL) (i.e.,
90%);
-
the entire shareholding of JK Files in RPAL (i.e., 89.07%); and
-
the entire shareholding of RPAL in MPPL (i.e., 59.25%);
(iv)
The merger of RPAL and MPPL into the NewCo (Merger).
5. For Demerger and Merger, RL, the Maini Promoters and other shareholders of RPAL shall
be issued shares of NewCo. Post-Merger, RL will hold 66.3% shareholding in NewCo and
each of the Maini Promoters will hold 9.5% shareholding in NewCo. The remaining
shareholding of NewCo shall be held by other shareholders of RPAL.
6. RL is a company incorporated in India and listed on stock exchanges viz., BSE and National
Stock Exchange. Mr. Gautam Singhania and his Affiliates (GS Affiliates) are the main
promoters of RL. RL and all its affiliates collectively form the RL Group1, which is engaged
in the following activities:
(i)
Apparel Business: manufacture and sale of suiting fabric, cotton & linen shirts,
garments, home linen, denim and providing made-to-measure garments;
(ii)
Property Business: development of residential apartments and providing Facilities
Management Services;
1 RL and all its Affiliates are together referred to as the RL Group.
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(iii)
Engineering Business: tools and hardware business carried out through JK Files
and JKTL; and
(iv)
Autoparts Business: automotive components and engineering products carried out
through RPAL.
7. JK Files, a company incorporated in India, is wholly owned subsidiary of RL. It has three
subsidiaries viz., JKTL, RPAL, and Scissors Engineering Products Limited (SEPL). JK
Files directly and through its subsidiary viz., JKTL is engaged in the manufacture, sale, and
distribution of files in India such as machinist files, saw files, rasp, special files, diamond
coated files, and needle files; cutting tools such as high-speed steel drills, drill sets, and taps;
and hand tools such as bolt cutter, plier, screwdriver, wrench, and plane. JK Files along with
JKTL also export files and drills to Europe, Latin America, Africa, North America, and
Asia-Pacific. JK Files is also engaged in import of power tools such as demolition hammer,
marble cutter, electric drill, cordless drill, impact drill and hot air gun; and power tool
accessories such as wood carving discs, diamond blades, cutting wheel, sanding disc, and
flap disc. JK Files is also in the process of installing a plant for the production of power
tools accessories in Maharashtra. RPAL is engaged in the manufacture of ring gears, water
pump bearing, and flex plate.
8. NewCo is a newly incorporated company in India.
9. MPPL, a company incorporated in India, does not manufacture a fixed set of products but
is engaged in providing customised manufacturing services wherein it manufactures high-
precision parts for machines/assemblies based on the design requirements of its clients. The
customised manufacturing services provided by MPPL are restricted to manufacturing parts
of a product and not of the entire finished product, with few exceptions. It is engaged in
manufacturing ~125 product families and inter alia caters to the automotive business and
power tools2 business through parts. MPPL provides services/supplies goods in 20
countries.
2 Power tools refer to tools that use additional sources of power other than manual power and include tools such
as drills, rotary tools, grinders, spindles, etc.
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10. It has been submitted that other than RL and its downward Affiliates, no other GS Affiliate
(including JKIT that is a non-banking finance company, and JKIB that is engaged in textile
related business and is an investment holding company), has any overlaps (i.e., any
horizontal relationship; or any existing or potential vertical or complementary linkages) with
the activities of the MPPL Group.
11. It has been submitted that other than JK Files, JKTL and RPAL, the RL Group does not
have direct or indirect shareholding and/or control over another enterprise, engaged in: the
production, distribution or trading of similar/identical/substitutable products or provision of
similar/identical/substitutable services; and/or any activity relating to the production,
supply, distribution, storage, sale and service or trade in products or provision of services
which is at different stages or levels of the production chain in which MPPL Group3 is
involved; and/or complementary activities as that of the MPPL Group.
12. It has been submitted that there is no horizontal overlap between the RL Group on the one
hand and the MPPL Group on the other hand.
13. With regard to the vertical interface, it has been submitted that tools manufactured by JK
Files/JKTL could potentially be used by MPPL for its manufacturing activities. Therefore,
the tool manufacturing activity of JK Files/JKTL exhibits a vertical interface with the
customized manufacturing services provided by MPPL. In this regard, it is observed that the
amount of total procurement of hand tools and files by MPPL in the past was minuscule vis-
à-vis the amount of sales of hand tools and files by JT Files/JKTL. It has been submitted
that MPPL uses only carbide-grade cutting tools for its activities which are not
manufactured by JK Files as JK Files manufactures only HSS-grade cutting tools. Further,
the market share of MPPL for precision engineering services is less than 1%. In view of the
above this vertical interface is not likely to raise any competition concerns.
