M&A Announcement

Oct 8, 2021

Slides

Ladies and gentlemen, good day and welcome to the conference call of Mother Sun Sui Systems Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask Please note that this conference is being recorded. I now hand the conference over to Mr. Vinci Sertin. Thank you, and over to you, Mr. Sertin. Thank you. Good evening, ladies and gentlemen. Welcome to our special conference on the acquisitions that have been done. I hand it over now to Rajat, who is the hero for the Chinese acquisition and also later to Kunal Duchar, who is the hero for the aerospace one. So over to you, Rajat. Go ahead. Thank you so much. Good afternoon. Good evening, everyone. So the first acquisition we're talking about is basically a mirror business in China that currently is a joint venture between Metrolong and JMCG, Jiangling Motor Company. It's 60% Mecherlung and 40% GMCG owned joint venture. And with this acquisition, we would be buying out the stake of Nekerland and it will become a joint venture between SMR and BHX and Jiangling. This is a business which is basically supplying mirrors to all the joint venture companies of JMC. So JMC has a joint venture with Ford and they have another joint venture with Isuzu. And they are into manufacturing of SUVs, pickups, LCDs and SUVs in the China market. They have about 6% to 7% of market share in commercial vehicle in China. And this company would be then actively supplying all the middle requirements for these automakers, which are basically JV companies of JMC. So that's in brief. And maybe I can now hand over to Kunal Bajaj to talk about the next acquisition that we made. Sure. Thank you, Rajit. Good afternoon, ladies and gentlemen. Really pleased to as you would have read, Mussel has entered into an agreement to acquire 55% stake in Sing Tools, which is based in Bangalore. This is our foray as we had promised you back a year ago. This is our foray into aerospace. SIM is regarded as one of the top 5 machining companies in India. It is vertically integrated. It has a state of the art surface treatment facility in Bangalore. Also has a joint venture with 1 of the leading machining and sheet metal companies called Lawak. It's been pleasant for the last 25 years, started from very humble beginnings. Today is a major producer of detailed parts, machine parts for aircraft doors, wings, tails and fuselage. Free state of the art facilities in the Bangalore region has order book of about 200,000,000 over the next 5 years and works with the 2 primes in aerospace as well with a number of OEMs and Tier 1s. Thank you. Thanks, Kunal. We are open for question and answer. So please go ahead. Thank you. Thank you very much. We will now begin the question and answer The first question is from the line of Sathya Savera from Nomura. Please go ahead. Hi, sir. Thanks for the opportunity. And I had a short question on this Aerospace business and basically steps in 9:30 or Vision 2025. I had a question on this. So we highlighted that we have a close to $200,000,000 of business potential. So is it that this is the order book as of now? And second is that we have reported close to INR 200 crores of revenues for the 'twenty three in FY 'twenty. So if you can just broadly indicate how to understand the ramp ups or within how many years this order book will be executed for the company, so some thoughts. And some if you can share some highlights about the potential which this company has been doing. Hello. Sorry, I think we lost the question. Could you please repeat it quickly? Yes. Sorry. So I think that this company has RMB 15,000,000,000 plus of book business potential. So does this mean this is the order book? And secondly, because it reported revenues of RMB200 crores in a second half, how to think about the distribution of the charter book? Does it mean we are 1 piece of this will be booked as revenues or how to think about revenue ramp up of INR 22 in the next fiscal 20 weeks? Anurag, can you answer that? Yes, sure. Yes, Surat, hi. You're right. The potential of the order book is $200,000,000 plus. Now a lot of this over 80% of this is firm. The order book is firm, and it's backed by long term agreements anywhere between 4 8 years depending on the agreement. On top of that, there's a lot of RFQs that Synthoo has received in the recent past, which we have some are, some we have already responded to, some we are in the process of responding to. We see an uptick to this. Revenue, of course, will come as we start executing the order book. The idea of Madison coming into the capital structure of SIM is to accelerate the execution of the orders. We are seeing a big uptick in the manufacturing and the build rates that have been given to us by Airbus and Boeing. I mean these are publicly mentioned by Airbus and Boeing and that is resulting in a much bigger order book. So all eyes on focus on execution and making sure we can focus into revenue as quickly as possible. Does that answer your question? Yes. And I mean any color on the margin side and how much did we pay to acquire this 65% to 50%? Kunal Baladi, maybe you could take that. Yes. So look, I think it has high double digit margins greater than 20%. If you apply that to a $520,000,000 you were beating somewhere in the 7.5x, 8x region in terms of EV EBITDA. What you may also want to note is looking at the order book, there is a significant ramp up expected going forward. And the order book is clearly much in excess of where the existing turnover reflects on it. The next question is from the line of Chirag Shah from Eden Rice. Please go ahead. Yes. Thanks for the opportunity. Yes. Sir, first a very broader question. Now congratulations for this acquisition on the aerospace side. So how should we look at the strategy in aerospace? This is one of the smaller size capability acquisitions or which were specific acquisitions at the behalf of customer or and how should one look at the aerospace space as far as inorganic activity is concerned over next 2, 3 years? Because it is one of the identified areas from Madison going ahead? Very good question, Shivan. Of course, if you want more details, Kunal is going to tell you about that. But you're very right. It is the 1st stepping stone, which has been happened. We have want to continue with this particular joint venture acquisition that we have. It is very difficult to get the approvals and all that. This company has all those facts and Kunal Bajan will talk about that. But if you don't have this vehicle, you cannot deliver the kind of target that we have for aerospace in about 2.5, 3 years, which has to go to about close to 1,000,000,000 plus dollars per year for this. So it's a very important step in the right direction. And now people were asking us where what is what are it that we are going to see about aerospace and all that. But Kunal, can you just very quickly talk about it without giving too much away on the strategy? Tiraj is very key on the strategy, but don't give the strategy away. Hi, Chirag. If we were part of the investor presentation last time, I think we talked about where our play would be in aerospace. Have talked about detailed parts as an area where we want to play in an aerostructure. So I'll stop there. This acquisition fits very well into that strategy. It actually gives us a head start, as Chairman had just said. It's got 60 plus qualifications and certifications. These are prerequisites to work in aerospace. And the barriers to entry in aerospace are very high. With this, we are able to come in very quickly and help scale this business, which is what we want to do. So the idea is to create a strong foundation, which SimTools gives us. And of course, we are looking at other organic and inorganic ways to build on top of this. There are other stuff that we're doing organically in plastics, in thermoplastics, plastics which plays to the strength of Madison. And then of course, inorganically, we're looking to create more synergies around SIM tools. Yes. Thank you very much. And Shriram, just oh, forget. Go ahead. Yes, I think the key thing is that one thing that you should read in what Kunal just mentioned, the scalability of this company is not just in India. We're in 41, 42 countries globally. So at least in 41 more countries, we can scale up this particular business because the same company has the capability to deliver it in different business. So please keep that in your imagination. It's not just an India story. I hope I'm clear since I can explain to you this opportunity. Yes. Thank you very much. And just a housekeeping question, and it's probably so both these acquisitions, this one and the Chinese JV as we had acquired, I presume the accounting of that Chinese JV would come as a share of associates, right? And this is for Kunal, if suddenly we would be able to address. And this company would be as a part of our subsidiary list. Is it the right way of looking at it? The next question is from the line of Prashant Kothari from Kepler. Please go ahead. Yes, hi. Confusions on this acquisition and the aerospace business as we all are kind of waiting for. I just wanted to understand maybe the addressable opportunity for the CIM itself and how should we think about that? Sorry to interrupt you. May I request you, Mr. Prashant to speak a little louder? Yes. I just wanted to understand the statistical opportunity for CIM, just their own kind of business. How do you see that in terms of maybe more number of customers that you can reach to or maybe, as you mentioned, what number of geographies and how that's helped because these businesses usually have global supply chains. I'm not sure I'm kind of understanding that the position properly. So definitely a lot more would be in public domain soon. But I think it is important to understand the opportunity of the company. And it cannot be tomorrow morning, but it is an opportunity because we have plants in 2 seventy seven facilities in 42 countries. So I'm just giving you the expense of it. Is this going to happen tomorrow morning? Pretty not. But the customers, one of the reasons why Malhotepin has been selected to look at this particular takeover with this company, the fact is that we are globally applicable. That's the unique thing. But Kunal, you can talk a little bit more. Kunal, Bajaj, sorry. Yes. Sure, sure. In terms of the market size, Boeing and Airbus have just come out with what the addressable market is for the next, till 2,040, and it's about a $9,000,000,000,000 market based on 40,000 aircraft. So this is post pandemic. We're not talking pre pandemic numbers. We're talking post pandemic numbers, 32,500 single aisle aircrafts and 7,500 Y40 aircrafts. Now if you look at West Wind plays, same plays in materials and aerostructures, which is about 25% of that market. So looking at about $2,000,000,000,000 plus market size that SIM has an ability to play in. Will SIM get all of it? Probably not. I hope so, but probably not. But the supply chain has changed. We said this again back last November that we are expecting the supply chain to dramatically change. And that is exactly what has happened. A lot of the small companies, the weaker companies globally have backed up because of the pandemic, it's unfortunate. But the ones that have survived have become stronger and bigger. The good companies who performed well like SIM are getting a lot more packages. So packages that are coming from, A, the companies that didn't exist or that backed up, Packages are moving to strategic low cost countries like India. We are seeing a lot of pressure on American and European companies, the existing supply chains of Airbus and Boeing. There's a lot of pressure on them to start outsourcing or to partner with companies in countries like India. And then of course, like Chairman said, right, there is a whole synergy around this. Motherson is very strong in wiring harness and thermoplastics. When we start talking to our customers, they are knowing about these solutions. So one of the primes, as an example, one of the 2 primes, we have agreed with them on the thermoplastics package. This is the first time that this company, this prime will be giving a thermoplastic outside the United States, first time in the history of this company. Similarly, in wiring harnesses, again, one of the primes has reached out to us. They are looking to diversify from their 2 major suppliers in wiring harnesses. And now we are in discussions with them. So all of this is connected. We have an opportunity to grow the machining and the aerostructures business and then bring the best of Madison. Kunal, wait, wait, wait. We can't we're in a silent period, yes. So please, please focus on the acquisition and the how that gets let's not talk about outside the things. Safe enough. Please take care of that. Thanks. All right. Okay. Thank you much. The next question is from the line of Nishik Chulang from Axis Capital. Please go ahead. Hi, sir. Thank you for the opportunity. Sir, I have two questions. Firstly, on CIAN tools, we had a big order book. Just wanted to understand what kind of capacity does Cian Tools have to execute this order or we will need to make CapEx over the next couple of years? And secondly, on the Chinese acquisition, what I have understood is, Pro then Isuzu will be the main customers on both passenger vehicle side and commercial vehicle side. Is that correct or we will have more OEMs to start with? Obviously, we can add more OEMs as we go. But to start with, we will have code in Existra as the 2 main customers or do we have more customers as well? Thank you so much. So we have to mirror first, Rajesh? Yes. So to start with, yes, you're right. This is basically Jiangling Motors who has 2 JVs. So one is this JV that they have with Isuzu and then there is another JV which they have with Ford in which Changan Motors also is a part of it. And these are the 2 babies which are then manufacturing SUVs and LCDs and SUVs. And these will be the customers to begin with. But as I said, this opens up the door for us to get into commercial vehicles in the whole market, right? So this is just the beginning. And I think as we go in and we bring in the technology that SMR has, we would then have the opportunity to get into a lot of other customers in the commercial vehicle. And as I said earlier in the introduction, JMC is about 6.57% of the total market. So there is still another 93% addressable market, which is available for growth in the future. Yes. And regarding CRM, Kolal, it can be answer that please, but is there a CapEx required or whatever and the growth? Yes. So if you look at this year and next year, we have sufficient capacity to be able to address the order book. But as we as looking at the build rates, again, the guidance given by our customers, we will and our ambition, yes, we will have to invest in 2 years' time. We will need to put in CapEx. I can understand that probably you will be Any rough indication as to what kind of a broad range also is just fine? Just wanted to understand what kind of asset funds are there in this business? What kind of capacity in terms of revenue potential FlyOver has? And will our CapEx what would be the broad range of CapEx that you'll need to incur to take on this capacity? Yes. Number 1, I think the capacity that exists right now is capable of delivering at least 1.5x more. So there seems to be enough headroom to begin with. Whatever additional that has to come in, mind you, this is largely a machining business. So you don't need to set up your machining outfits, but the design engineeringIT related stuff is already embedded. So the more machining you do, you end up actually leveraging the same, let's say, base R and D that exists. So to that extent, the expansion CapEx is required is much less. And if I can put a guesstimate right now, it will be low middle digits kind of CapEx to meet at least the existing order book that we'll pay. And a bit from my side to help you understand, Mother Sun is a manufacturer of cutting tools. And I think we can definitely add to their competence by increasing the productivity by using we manufacture diamond and CBN and many other different things. So I don't know. I think we'll come to know as we get deeper into the company, we'll come to know. And we are absolutely positive that this particular strength also is a big strength for SIM and other parts of Mabasim, which increases productivity dramatically. Okay. Thank you. Thank you so much. Thank you. The next question is from the line of Nishant Dvash from ICICI Securities. Please go ahead. Yes. Hi. Thanks for the opportunity and congratulations and congratulations. So just first So well, it's a positive cash flow business. That's what I can say. And then I think the synergies that we have with the rest of the SMR business and the know how that we bring to the company, I think there is huge possibilities and improvements. There are also opportunities to vertically integrate the business more as we go in. As it stands today, they are sourcing most of their parts from outside, which is going to change as we step in. So I see a huge opportunity there to increase the profitability as we go forward. Okay. Thanks, Amish. And second question is on the SIM tool side. So I think you briefly mentioned about portion of vertical integration that we can do some of through sites. So can you give us a sense as to you said this is already doing 20% gross margin. What kind of vertical integration does this company have on the machine side? Do they build their own machines or they are still purchasing it from some external vendors in Germany or Japan, something on that side in terms of where it is on the capability side, because we also say that it's a 25 year old and a long history of relationship. So, in short, they will have some share of meaningful share of business with existing customers. So, just trying to understand where the vertical integration level is and where you can push it forward? Great question. But you must take into account that we are at this moment in the process of understanding where the synergies lie and things like that. But I'm sure Kolod Dajjal is going to give you some inputs on that. Just remember that the capability of over 2 70 plus facilities on motherfarms will become extra huge advantage to CIN. So we make our own machines, we make our own even the raw material supply. I mean, we mainly do it ourselves, cutting tools that we are already doing it ourselves. So a lot of things are happening. And I'm sure it's going to get better and better. Now would you want to give a little bit of think to them, but be careful about I'll stick to the outlook, sir. Sir. Yes. I'll stick to the outlooks, sir. Yes. So in terms of vertical integration, as you may or may not know, there are a lot of processes that machine part has to go through in aerospace, and they're very stringent processes. So what first of all, a lot of the machines are from Japan, the Japanese machines doing aerospace work. And they're new because the facilities are new. So if you look at what they've created in FCZ, which is a few years ago, it's new, state of the art. The joint venture that there is with Lavap is also very recent. So again, the machines are state of the art. Vertical integration, SIM, as we had mentioned in the brief, owns or has a subsidiary called ATPL. This is a treatment surface treatment facility, which is very, very critical in the aerospace industry. Typically, what companies do is they machine and then they outsource treatment. Whereas in SIM's case, the treatment is done in house. That allows SIM to control quality. It allows SIM to do on time delivery and the customer really appreciates that, which is why these are approved by both the primes. This creates a lot of synergies for the asset. Now looking at this, there is room vertical integration. And as we get into the asset, we will look at how we get more vertically integrated. So, Kunal, if I can just ask a follow-up question here. With the Prime, where without putting the serial number, I don't know if you're comfortable sharing that, but where do you think the business the share of business lies in the opportunity that's been playing at? And you think that can dramatically change by obviously whatever you have highlighted from a global footprint standpoint as well as getting to a larger business getting into a larger business fold. Can that share of business dramatically improve across programs with the trends? I mean, I think so. That's the reason why we're doing this acquisition. We've got very positive feedback from the customer base, and they've welcomed this. So we are expecting large packages to be given to their existing supply chain. And we are sitting in a very good position to take advantage of that. So the idea will always be to grow, right? We as Babacan are very excited to come into SIM at this part in their journey. I hope as investors you are too. Understood. Thanks a lot. Thank you. The next question is from the line of Joseph George from IIFL. Please go ahead. Hi, thank you. Am I audible? Yes. Thank you. So, first of all, congratulations on the acquisitions. I had couple of questions. So one was an extension of what Prashant had asked earlier about the size of the opportunity. Of course, you know, give out numbers running to 1,000,000,000 of dollars. That sounds good. But if you specifically look at the components that the company makes, how big is the realistic opportunity size maybe go globally? Give us some practical guidance with respect to the industry size instead of running into 1,000,000,000 of dollars? George, in all humility, our target for Madhu san group is RMB36 1,000,000,000. So definitely the trillions won't get covered in that. They'll go much more than that. But both Kunaal, if you can help George, then that would be good. But just as we really we're looking forward looking, so we don't want to be there. So just please understand our situation that we are in a quiet period. But as much as Kunal's KN and KB, if you can help, great. Sure. So, George, sorry, I didn't I was trying to paint the full potential of the market size. Of course, for us, it's a subset of a much smaller subset of that. I think the important thing to note is that we are in the beginning of a growth cycle in aerospace. Again, everything has to do with bill rates. The clients issue a bill rates to their supply chain. This is that bill rate that they give and the kind of components that a company does, you start prepping for it. So the bill rates that they've given us, and they give us 5 year bill rates, in the current year will be month by month, they are very promising. The growth that they've given us is tremendous, and that is resulting in the packages that we're seeing, which is resulting in the order book. What we want to do is work with the customer base, with our customer space to see if we can do more, and that will be the endeavor. Khem, I don't know if you want to add something. Yes. Look, the one other way to think about it is when you also say the addressable market, the addressable market is significantly increasing. There is an overall market, but there is an important part of where is this production shifting. And with the whole aircraft purchasing power coming, let's say, eastwards, is also shifting towards the LCCs and that's where the interplay lies in terms of having a presence in here and then being able to whether it's on an offset basis, whether it's on poorly being able to supply this at better cost terms. Is that part of that shift is expected to occur and then provide a much larger addressable base to play off from? Sure. Thank you. So, okay, if I were to ask you a very specific question, I mean, as analysts, we always grapple with that addressable market assessment. So if I were to ask you a very specific question, in our regular aircraft, say A320, the value of components that this company makes, what will be the value on a per aircraft basis? We can share that, we can do the rest of the assessment ourselves. Would that be possible? Very granular, but again, so that you understand it. Kunal, Kian, are you going to take this or you're going to take this? I can give you a little bit of flavor around it. The reason why the addressable market is very large is because anything for example it does stuff on being those sectors which is all the metal product which is all the machines. So there are certain parts of these that they are doing now, but it's not to say that they don't have the capability of doing the other parts. The other parts to some extent has not come in as what KB was mentioning earlier in terms of larger packages, etcetera, which is where the shift is occurring towards the LCC construct in the current, let's say, supply chain region that is occurring now. So that's why the addressable market is that large. From a capability, it's there to tap into. Obviously, you would appreciate that these are often critical parts, which take some time for the customers to get comfortable with, take some time for customers to feel that you can provide the same quality, etcetera, consistently, which is what we like about CEMIC. And then clearly, the objective would be to try to get larger and larger packages. I don't know, KB, do you want to add? No, I think you've covered it. And I think just take the example of what Motherson did with the automotive side effect. When we started off, we started off with a simple wire harnessing. And then today, we are making over 20,000 components for the automotive industry. And so really the sky is the limit. But I think if you appreciate the level of involvement is that the customer has asked us to take over this particular thing. It has been facilitated together with the customer. So you can read into that. You can take advantage of that just to get an imagination of where we will be, but really very difficult to quantify it at today's date. Sure. Thank you, sir. So the second question that I had was with respect to how the aerospace big targets that you have with respect to revenues that fit into the $36,000,000,000 number, etcetera, will be structured. So the direct question there is, will a large part of the Aerospace business? RMB 36,000,000,000 not RMB 33,000,000,000 dollars modestly in the bank, yes, it's 36,000,000,000. It's in our annual report, yes. What were you asking? Yes, sorry. So I thought I said 36, So the question that I had was so the non auto piece, which includes Aerospace, I think the target for that was 9,000,000,000. And so I'm guessing that Aerospace would be a big chunk of that 9,000,000,000. Dollars And so in that context, the growth that you're targeting in the Aerospace business, which is captured in this big addressable market that you talked about, will most of that be captured through this entity? Or is there an option entity? And hence, this entity and hence? No, no, no. We have cleared the same. We are not going to stop because of this acquisition. Definitely, this and multiple other things are happening all across the world, but we are not at liberty to talk about that just now. But all we can say is just watch the space and this is a very important acquisition that we are doing because it tells you how serious we are about what we are talking. And rest, I would leave it, we have on November 2022. We are going to come back to all of you in the midpoint report we are going to give you. And I think you will get much more favorable at that time also. But this is not the only one and does not restrict us from doing whatever we want to do across the world. Understood, sir. Thank you. Thank you. The next question is from the line of Dinesh Gandhi from Hotel Lobsar Financial Services. Please go ahead. Yes, sir. My first question pertains to CIM. The $200,000,000 order book which you're talking of, is that based on fire build rate which we have or based on the longer build rate? Kumar, Vijay? Yes. So the guidance that we again get from the primes is on 5 year build rates. That's how they give their guidance. Okay. Okay. And second question from Cian perspective is the new products which we can do based on the metal technology they have. What could be the validation cycle for that and from day 0 to actual commercialization? Would it take what about 3 to 4 years or what's your indication on that? Thanks. The answer is it depends on what exactly are they doing. So the core is machining, they've got the certifications, they've got the qualifications And they're doing a broad variety of different specialty metals, it's not just aluminum. So we don't think there are additional qualifications with our certifications they already have, so those stay. But yes, if we are looking to do to vertically integrate even more, then yes, we will require qualifications and certifications for that. Typical qualification takes a typical certification takes 3 to 6 months. If you are an old hand at it, then 3 months. New hand, 6 to 12 months. And then qualifications are something to work with the OEMs to get qualified. But qualification can take anywhere from 10 days to 2 months depending on the OEM's availability. There's a lot of preference given to existing suppliers. So that person is in a good position. Right. But for a new component, the validation of component would be longer gestation period, right? Again, I said it depends on the component, right. And if you already have done similar components and played with that kind of metal before, then it's the cycle time is much shorter than if you do something that's very different. Thank you. The next question is from the line of Maithili Balakrishnan from Alchemy Capital. Please go ahead. Hi. Thanks for taking my question. I'm going to take you a little bit on seeing what's the kind of customer concentration that we have? Are we easily up to 4 to both the big banks? Or is there a higher exposure to work on for the other? I'm sorry, there's some background noise, so I didn't catch that question very clearly. Sure. I'll try again. I was wondering what's the kind of customer concentration that you have at this point? Do you have more exposure to 1 of the Now you got it. It's about concentration of clients. I think she wants to know more about the customer spread. I'll just show. Hello? I got your question. I got it. No, so they have a diversified customer base. As you know, there are 2 clients. 1 is American, 1 is European. They are working equally with them either directly or indirectly to the Tier 1 OEMs. So it's a good mix. It's diversified, and there's an opportunity to grow that even further. Got it. And in terms of are we a Tier 1 as far as both the suppliers are concerned of the European and the American side of it? We are a Tier 1 and a Tier 2, both. Got it. Also, what are the technicalities on the Chinese acquisition? Could you help me understand whether it was also customer led or was it driven by our own sort of going after this particular piece of the business? And also, could you sort of help me understand the synergies which are there with our existing business in China? So yes, I think it's a mix of both. Obviously, the current stakeholder, MetaLang, wanted to exit. And our partner in China, that is MDX, also has a very good relationship with this group, Gangling Motors. We already have 2 other babies with them. So there was, of course, a discussion with them as well and Yanling was very happy that FMR can step in. So yes, it is going to be a very good partnership going forward because we have good experience with Yangling already for last many, many years. Got it. And in terms of our own presence in China, that is also included in existing middle facilities, we can sort of maybe build on further synergies or nothing add that? Yes, yes. So we already have 5 other facilities in China. And yes, definitely, there's going to be a lot of synergy. As I said, there is a huge scope of increasing vertical integration. There is engineering setup that we have, which can help this new company to scale up in terms of technology that we can offer to the customer. So there is going to be synergy in our access to the business. And also, I just have the plant of this to come in the Philippines? You are not there in that That also is a both way. That's right. So even the manufacturing footprint, if you see, we are there in the Shanghai area and we are also in the northern Beijing area. We are also in Central China in Chongqing area, but we are not there in South and Southeast. And this is in Southeast, which then also augments our footprint. And as you know, China is a very large country. So we have to cover that with new plants. So this also then complements our existing footprint. Got it. My last question is on this, key text indication that you had given for PMM. And I didn't understand it. You said something like a low middle digit key text. I'm sorry, what does that mean exactly? Sorry, low double digit CapEx. The next question is from the line of Anurag Sharma from Citi. Please go ahead. Good evening, sir. A question on CIM. Given the enterprise value, what would be the cash outflow for CIM out of this INR4 1,000,000,000? Sorry, guys, what do you mean by cash also? What is the total acquisitions, right? Correct. The dividend value would also add some debt and build it to the right. So what will be the if you could give some idea on the debt which will be built in? Look, the debt, there are obviously things to be done between signing and closing. So some of that will be a little moving number. But it will lie somewhere in that INR150 crores to INR 175 crores at an estimate level, right? I mean, it obviously depends how the closing situation looks like. Got it. Got it. Thank you for that. That's all from my side. Sir. Ladies and gentlemen, this was the last question for the day. I would now like to hand the conference over to Mr. Vinny C. Sargal for closing comments. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Thank you very much. Ladies and gentlemen, these are COVID times and hence acquisitions are not easy. Our teams take a lot of pride that they remain safe and yet cover up these particular acquisitions in as much detail as they can. So thank you very much. And I hope you guys stay safe and healthy and catch up with you soon, probably at the next acquisition. I don't know. Thank you all very much. Bye bye. Thank you. On behalf of Mother Sun's Sony Systems Limited, that concludes this conference. Thank you for joining us, and you may now disconnect.