Bharat Forge has not confirmed reports suggesting that the company is planning to acquire a majority stake in Shanthi Gears and has only said that it does not comment on speculative media reports.

The company pointed out that the reports are not based on any information given by the company. Bharat Forge is the world's largest forging manufacturer and it might acquire Coimbatore-based Shanthi Gears to expand its present.

Shanthi Gears is itself the second largest industrial-gear box maker in the country and will allow Bharat Forge to become a significant player in the segment. If the reports are to be believed, Bharat Forge might acquire chairman P Subramanian and his family's stake in Shanthi Gears.

The valuation of the deal is not known but analysts say that the Shanthi has a valuation of eight times of their respective earnings before interest, taxes, depreciation and amortisation (Ebidta) and this means that the Bharat Forge will have to pay about pay Rs 227.30 crore to buy out 44% stake held by P Subramanian and family.

Shanthi Gears reported an Ebidta of Rs 64.4 crore during the financial year till March 31, 2012.