SKF India’s Great Unbundling: A Strategic Split to Power India’s Industrial and Automotive Revolutions 

In a strategic move to capitalize on India’s divergent economic growth engines, SKF India has officially demerged its automotive and industrial businesses into two separate, independently listed companies, effectively creating distinct investment vehicles for shareholders who will receive a 1:1 share in the new industrial entity.

This unbundling allows each company to pursue focused growth strategies: SKF Industrial is positioned as the backbone of India’s infrastructure and manufacturing boom, targeting sectors like railways, renewables, and mining with planned investments of ₹800–950 crore, while SKF Automotive will aggressively chase the mobility revolution, concentrating on EVs, premiumisation, and last-mile mobility with a ₹410–510 crore investment plan to accelerate innovation and capacity expansion in a rapidly transforming market.

SKF India’s Great Unbundling: A Strategic Split to Power India’s Industrial and Automotive Revolutions 

In a move that signals a profound bet on the divergent futures of India’s core economic engines, SKF India has formally cleaved itself in two. Effective October 1, 2025, the bearings and engineering solutions giant has demerged its automotive and industrial businesses into separate, independently listed entities. This isn’t merely a corporate restructuring; it’s a strategic masterstroke designed to let two powerful, yet fundamentally different, businesses run at their own pace and pursue their unique destinies in a rapidly transforming Indian economy. 

The newly christened SKF India Limited will continue its legacy as the automotive-focused arm, while shareholders will receive one share of the new SKF India (Industrial) Limited for every share they hold. This move, first greenlit in late 2024 and now blessed by shareholders and regulators, ensures investors get a direct, unadulterated play on two complementary but distinct growth narratives shaping the nation. 

Beyond the Balance Sheet: The Strategic Rationale for the Split 

On the surface, a demerger simplifies operations. But for SKF, the division runs much deeper. The needs of an automotive client racing to launch an electric vehicle (EV) are worlds apart from those of a steel plant or a wind farm operator. The split acknowledges that these sectors operate on different innovation cycles, investment horizons, and customer engagement models. 

Mukund Vasudevan, Managing Director of SKF India Ltd., encapsulates the vision: “This structure strengthens our ability to allocate capital effectively, accelerate innovation, and create distinct value streams.” In essence, the demerger is an antidote to the “conglomerate discount,” where a company’s diverse parts are valued less than the sum of their potential. By unbundling, SKF unleashes two pure-plays, each able to: 

• Tailor R&D and Innovation: SKF Automotive can hyper-focus on the compact, high-performance bearings for e-axles and the specialized solutions required for EV thermal management. SKF Industrial can pour resources into large-diameter, ultra-durable bearings for wind turbines and heavy machinery. 

• Sharpen Customer Focus: Each entity can build dedicated sales, marketing, and engineering teams that speak the specific language of their clients, fostering deeper partnerships. 

• Optimize Capital Allocation: No more internal competition for funds. The board of each company can now make swift, sector-specific investment decisions without cross-subsidization concerns. 

SKF Industrial: The Backbone of “Make in India” 2.0 

SKF India (Industrial) Limited steps onto the stage with a clear and critical mission: to be the enabler of India’s next wave of industrialization. Its focus on manufacturing, railways, renewables (especially wind), cement, mining, and metals aligns perfectly with the government’s massive capital expenditure push in infrastructure. 

Planned Investments (₹800–950 crore through 2030): This capital war chest is not for mere maintenance. A significant portion is earmarked for a new manufacturing facility in Pune by 2028. This expansion is a direct response to the anticipated surge in demand from sectors like: 

• Railways: As India expands and modernizes its railway network with dedicated freight corridors and Vande Bharat trains, the demand for reliable, high-speed rail bearings will skyrocket. 

• Renewables (Wind): India’s ambitious wind energy targets depend on robust turbine technology. SKF Industrial’s expertise in large, sophisticated turbine bearings positions it as a critical supplier in this green transition. 

• Infrastructure & Mining: The relentless pace of road construction, urban infrastructure projects, and the push for domestic coal and mineral production all rely on heavy machinery that, in turn, relies on high-performance industrial bearings. 

This entity isn’t just selling components; it’s selling reliability and efficiency, which are the bedrock of productivity in these capital-intensive industries. 

SKF Automotive: Riding the Wave of Mobility’s Great Disruption 

While its industrial sibling builds the nation’s backbone, SKF Automotive is tasked with navigating the thrilling chaos of the mobility revolution. The Indian automotive sector is no longer a monolithic industry; it’s a fragmented, fast-evolving landscape being reshaped by multiple, simultaneous forces. 

Planned Investments (₹410–510 crore by 2030): These investments across its plants in Haridwar, Pune, and Bengaluru are strategically targeted to capture value from key trends: 

• Electrification (EVs): This is the centerpiece. EVs require completely new bearing solutions. They are quieter (demanding low-noise bearings), operate at higher speeds, and must handle different load dynamics compared to internal combustion engines. SKF Automotive’s R&D will be laser-focused here. 

• Premiumisation: As Indian consumers trade up, the demand for vehicles with superior performance, comfort, and luxury increases. This translates to a need for more advanced, high-margin bearing technologies. 

• Last-Mile Commercial Vehicles: The explosion of e-commerce and hyper-local delivery has created a massive market for small, durable commercial vehicles. This segment has its own unique requirements for cost-effectiveness and reliability. 

• Hybridisation & Safety: As hybrids serve as a bridge technology, and advanced driver-assistance systems (ADAS) become commonplace, SKF must innovate to meet the precision and safety standards these technologies demand. 

The Investor’s Perspective: Two Tickets for Two Different Rides 

For shareholders, the demerger is a gift of choice. Instead of a single, blended stock, they now hold two distinct assets. 

• SKF Industrial will likely be viewed as a steady, cyclical growth stock. Its fortunes are tied to the long-term, government-driven infrastructure cycle. It offers stability and exposure to India’s domestic capital formation story. Its performance will be a bellwether for the core industrial health of the nation. 

• SKF Automotive transforms into a dynamic, high-growth tech-play. Its valuation will be more sensitive to auto sales cycles, technological disruptions, and EV adoption rates. It offers higher growth potential but with correspondingly higher volatility and competitive intensity. 

This separation allows investors to align their holdings with their individual risk appetites and thematic beliefs about India’s future. 

The Road Ahead: Challenges and Opportunities 

The demerger is not without its challenges. Both entities must now establish their independent brands, manage the operational complexities of the split, and face competition as more nimble, focused players. 

However, the opportunities far outweigh the risks. SKF Industrial is poised to become an indispensable partner in India’s national infrastructure projects. SKF Automotive, unshackled, can move at the speed of the auto industry, forging deeper ties with EV startups and legacy OEMs alike. 

Conclusion: A Corporate Microcosm of a Macro-Economy 

SKF India’s demerger is more than a corporate event; it is a microcosm of the Indian economy itself. It reflects the understanding that the nation’s growth is being driven by two powerful, parallel narratives: the methodical, steel-and-concrete build-out of its industrial infrastructure, and the lightning-fast, technology-driven transformation of its mobility landscape. 

By cleaving these two stories into separate companies, SKF has not just unlocked shareholder value—it has positioned itself at the very heart of both revolutions, ensuring that as India builds and moves, SKF will be there, providing the precision and motion that powers progress.