HFCL Plans to Buy 50% Stake in Nimpaa Telecommunications

HFCL and Nimpaa Telecommunications, a private organization that is incorporated in Chennai, Tamil Nadu has signed a Share Subscription and Shareholders’ Agreement on March 15, 2021. As per to the agreement, HFCL intends to acquire up to 50.0 percent of the paid-up equity share capital of Nimpaa, in one or more tranches. This is initiated by subscribing its equity shares.

However, the company comments, “The acquisition would help the Company to competitively address business of next generation telecom wires/cables.”

HFCL is buying the stake in Nimpaa, to keep in line with thrust on addition of new telecom network products in the field of communications, especially Aramid Reinforced Plastic (ARP) rods. ARP rods shall be manufactured and supplied by Nimpaa for HFCL, and its subsidiaries and associate companies’ captive consumption.

Alongside, the company has also set the time period to complete the acquisition by April 2021 for a compensation of Rs. 1 Crore towards subscription amount of a fresh equity shares of Nimpaa.

Furthermore, Nimpaa was incorporated to carry on the business of manufacture of all types of equipment, components, accessories and cables required for telecommunication systems, networks and services. Company also Manufactures Aramid Reinforced Plastic (ARP) rods and other correlated equipment/ accessories. Moreover, the company is incorporated since September 22, 2020. Since, Nimpaa is a newly incorporated company, no financials have been prepared.

HFCL’s Promoters has held about 42.05 Percent stake in the company whereas 56.22 Percent stake is held by the Public as of quarter ended December 2020.