The board of Tega Industries has greenlit a move to raise up to ₹4,000 crore in a mix of equity and debt as it prepares to acquire US-based Molycop for an enterprise value of approximately $1.48 billion.
Kolkata-based Tega, which specializes in mining consumables and material handling products, has partnered with private equity firm Apollo Funds to acquire Molycop, a leading global supplier of grinding media for the mining sector, from an affiliate of American Industrial Partners (AIP). Under the agreement, Tega will hold about 77 percent equity, while Apollo will possess around 23 percent in the acquired company, founded in 1917.
“As part of our equity contribution, we require ₹3,300 crore. The board has approved raising this amount through a mix of equity and debt. The final combination will be determined after we complete the fundraising process,” said Mehul Mohanka, Managing Director and Group CEO of Tega Industries, to businessline.
The acquisition is anticipated to close by December 31, 2025, pending necessary regulatory approvals. Once finalized, Tega Industries will become the primary shareholder of Molycop, with Apollo Funds retaining a substantial minority interest.
Funding Structure
During a conference call on Friday, Mohanka explained that the transaction will be financed through a combination of equity instruments, including preferential allotment and qualified institutional placements amounting to $248 million, alongside a debt component of about $112 million. This blend may be adjusted based on how the fundraising unfolds.
Importantly, a contingent payment of roughly $120 million could be made within 45 months of the acquisition’s finalization, based on mutually agreed terms.
“The deferred contingent liability of $120 million will only be honored once specific predefined criteria are met within a set timeline. These criteria are mainly tied to the reopening of certain closed mines where Molycop was historically a key supplier. This framework ensures that the liability remains performance-based and linked to the possible growth in EBITDA from these contracts. If the EBITDA targets are not achieved, the deferred liability will not activate,” Mohanka elaborated during the conference call.
Strategic Expansion
Post-acquisition, Tega aims to elevate Molycop’s EBITDA margins from the current 11.5 percent to 15 percent, aiming for long-term value while avoiding additional fixed costs. “As part of our synergy strategy, we plan to relocate the current headquarters to a more strategically advantageous area for better global access, expected to generate cost savings of $7 billion. This plan has already been discussed with the management teams,” Mohanka shared.
With the planned acquisition and integration of Molycop’s complementary offerings, Tega believes it will emerge as a top-tier designer and manufacturer of ‘critical-to-operate’ consumables across various production stages in the mining, mineral processing, and material handling sectors with an innovative and differentiated product assortment.
While Tega and Molycop will retain their identities as separate entities, they will operate under a unified leadership framework to ensure synergy and strategic alignment. Mohanka noted that talent retention and cross-functional collaboration would be actively encouraged to maintain institutional knowledge. “We will also implement joint governance structures to monitor integration progress. Our aim is to create a cohesive and agile organization that capitalizes on the strengths of both companies to enhance customer value and foster sustainable growth,” Mohanka added.
Currently, Tega Industries operates in over 92 countries and boasts advanced manufacturing facilities located in India, South Africa, Australia, and Chile.
Published on September 13, 2025
