CG Power and Industrial Solutions Ltd. announces an acquisition

Verdict: Tosil Systems is a small tuck-in relative to CG Power. Its latest reported annual turnover was Rs 11.12 Crores for FY25, with Rs 11.94 Crores projected for FY26; the Rs 16.44 Crore consideration implies approximately 1.48x FY25 P/S or 1.38x on projected FY26 turnover. Tosil’s net profit and net worth are not reported in the cited transaction coverage, so P/E and P/B cannot be calculated.^[1]

Tosil scale and implied purchase multiples

The FY26 figure is a projection, not a reported actual. The consideration relates to 100% of Tosil and is intended to add semiconductor, embedded software, silicon design, verification and Edge AI engineering capabilities to CG’s platform.^[3]

Scale relative to CG Power’s segments

The consideration equals only about 0.03x Industrial Systems’ FY26 PBIT and 0.01x Power Systems’ FY26 PAT before exceptional items; these are scale ratios, not P/E multiples, because the denominator is CG’s segment profit rather than Tosil’s earnings.^{[2] [4]}

For broader context, CG’s FY26 consolidated revenue was Rs 15,296 Crores, making the acquisition price roughly 0.11% of group revenue, derived.^[5] The company’s FY26 consolidated market-cap-to-sales ratio was 9.3x and P/E was 95.0x.^{[6] [7]} However, comparing those public-market multiples with Tosil’s private transaction P/S is not like-for-like: CG’s figures include the value of its entire consolidated platform, while Tosil’s consideration reflects a small, strategic capability acquisition.

Analytical read: The 1.4–1.5x sales price is not demonstrably expensive or cheap without Tosil’s PAT, net worth, cash, liabilities and growth-quality data. The economics appear to depend more on the strategic value of its engineering talent and semiconductor design capabilities than on Tosil’s current revenue contribution.

_Scope note: this comparison also included Bharat Heavy Electricals Ltd. (BHEL); Siemens Ltd. (SIEMENS); Siemens Energy India Ltd. (ENRIN); Hitachi Energy India Ltd. (POWERINDIA); ABB India Ltd. (ABB), which the answer above does not cover. Ask about any of them for a full side-by-side._

The transaction is structured as a share acquisition, not an asset purchase. Axiro Semiconductor is reported to be acquiring 100% of Tosil Systems’ shareholding under a definitive agreement, for Rs 16.44 Crores ^[2].

The stated rationale is broadly to strengthen semiconductor design capabilities ^[8]. However, the disclosure does not specify whether the principal value is:

• an acqui-hire of Tosil’s engineering team, including any retention or integration arrangements; or
• the acquisition of proprietary semiconductor design IP, including identified patents, technology, or licences.

Nor does the cited transaction description establish that the deal is specifically intended to support the Sanand OSAT facility. Accordingly, the defensible conclusion is: share deal; strategic design rationale disclosed, but talent-versus-IP emphasis and Sanand linkage remain unspecified.

CG Power is moving toward a more semiconductor-native version of design-led manufacturing. Tosil adds front-end engineering capabilities—silicon design, verification, physical implementation, embedded software, Linux BSP and Edge AI—to CG’s back-end OSAT platform. The strategic ambition is therefore to connect design and application engineering with packaging and testing, rather than only adding electronics assembly capacity. However, this remains a capability build: the Tosil acquisition was agreed on 17 August 2026 and was expected to close by 31 August 2026, subject to conditions precedent. ^{[9] [10]}

What Tosil changes for CG

• It adds semiconductor engineering, not merely product engineering. Tosil’s activities sit closer to the chip-development workflow than conventional EMS design: verification and physical implementation are directly tied to semiconductor execution, while embedded software and Linux BSP work connect the chip to end applications. ^[11] This is a different design layer from designing or prototyping a finished electronic product.
• It gives CG a possible design-to-package pathway. CG Semi provides the packaging and testing platform, including traditional and advanced packages such as QFN, QFP, SOIC, FC BGA and FC CSP. ^[12] Tosil could potentially help CG participate earlier in the customer’s product cycle and improve its ability to win application-specific semiconductor or embedded-engineering work before the package reaches the OSAT stage. That is an analyst inference, not a disclosed revenue synergy.
• The model is upstream-plus-downstream rather than pure OSAT. OSAT by itself is a manufacturing and testing business. Tosil gives CG an upstream technical capability that may improve customer engagement, design-in opportunities and solution content. It does not, however, make CG a wafer-fabrication company or establish ownership of proprietary chip IP.

How this differs from Kaynes

Kaynes is already presenting a broad design-to-lifecycle ESDM model, with design-led ODM, EMS, OSAT and PCB capabilities. ^[13] Therefore, CG’s differentiation is not that it is the only peer moving beyond assembly.

The distinction is the type of design being added:

• Kaynes’ disclosed design-led offering is largely system-, product- and application-oriented, spanning smart devices, IoT and industrial technologies. ^[13]
• Tosil’s disclosed expertise is more directly semiconductor-engineering-oriented, particularly silicon design, verification and physical implementation. ^[11]

Kaynes may therefore have the broader integrated electronics platform today, while CG is attempting to build a more focused semiconductor stack around OSAT. The commercial test for CG will be whether Tosil’s services generate external design revenue or feed meaningful OSAT volumes; the acquisition filing does not provide customer, order-book, IP ownership or cross-selling targets. ^[11]

How this differs from Dixon

Dixon’s disclosed model remains more clearly scale-led EMS, complemented by design/prototyping and R&D. Its company material highlights 30 manufacturing facilities, seven R&D centres and services spanning design/prototyping, manufacturing and assembly. ^[14] Recent expansion cited in the news flow is concentrated on product and component categories such as camera and display modules and laptop manufacturing. ^[15] Consequently, Dixon’s move up the value chain appears to be through product engineering, localisation and component manufacturing, whereas CG’s Tosil move is explicitly into semiconductor design services.

Bottom line: CG’s semiconductor strategy is becoming design-enabled OSAT—a back-end manufacturing platform supplemented by semiconductor and embedded engineering. Kaynes is pursuing a broader integrated ESDM and ODM platform that already includes OSAT and PCB, while Dixon is primarily extending a large EMS franchise into design, components and new product categories. CG’s potential advantage is the technical adjacency between Tosil’s silicon-engineering work and CG Semi’s OSAT capabilities; the key uncertainty is whether that adjacency converts into proprietary designs, recurring engineering revenue or captive packaging volumes.