BIBalkrishna Industries502355JV announcement

Framework, offtake and service agreements with Pirelli for a proposed 50:50 passenger car tyre JV

Three agreements signed with Pirelli Tyre S.p.A. on 22 October 2026.

By ScoutQuest · Thu 22 Oct 2026, 10:49 AM IST · 3 min read

JV Shareholding

proposed 50:50 joint venture company in India

JV Incorporation Deadline

December 31, 2030

Pirelli Consolidated Revenue

EUR 6.78 billion for the financial year ended December 31, 2025

On 22 October 2026 the company signed three separate agreements with Pirelli Tyre S.p.A. of Italy, a joint stock company wholly owned by Pirelli & C. S.p.A., the parent of the Pirelli group. They are described together as one overall transaction that can eventually lead to a joint venture company in India for passenger car radial (PCR) tyres.

The three agreements

• Framework Agreement: sets the structure, timelines and key terms of the overall transaction, including a joint venture agreement to be entered into in future for a JV company in India.
• Offtake Agreement: the company will manufacture Pirelli-branded PCR tyres to Pirelli's specifications at its Bhuj PCR plant in Gujarat and sell them to Pirelli and/or its affiliates.
• Service Agreement: Pirelli will provide technical support services relating to BKT-branded tyre testing, using its proving grounds, simulation systems and equipment outside India.

Key terms of the proposed JV

• Shareholding of 50:50 between the company and Pirelli, each holding 50% of the share capital; the JV will set up and operate a new plant in India.
• Board of four members, with each party nominating two directors; the chairperson rotates between the parties.
• The JV's manufacturing capacity is to be shared equally between the parties.
• JV shares carry a 5-year lock-in; after that, each party gets a right of first refusal and tag-along rights, with restrictions on transfers to competitors.
• The JV is agreed to be incorporated by December 31, 2030, subject to satisfaction or waiver of conditions precedent under the Framework Agreement and the JV Agreement.
• While the Framework Agreement is in force (it expires when the JV Agreement comes into force), neither party may enter a joint venture or similar arrangement in India with a third party for manufacturing car, light truck, motorcycle or bicycle tyres; plants wholly owned by either party are excluded.

Commercial terms

• Offtake pricing is raw material at actuals plus conversion costs, payable in INR for domestic supplies or EUR for exports, supported by a minimum annual offtake commitment from Pirelli and a corresponding capacity commitment from the company.
• Pirelli will grant the company a limited, non-exclusive right to use certain Pirelli know-how and trademark to make Pirelli-branded tyres at the Bhuj PCR plant for supply to Pirelli and/or its affiliates; each party retains its own intellectual property.
• The company will not manufacture tyres for third parties that are comparable to or compete with Pirelli PCR tyres, but remains free to develop, manufacture and sell its own BKT-branded PCR tyres.
• Service Agreement fees are payable by the company in EUR, at arm's length, as per an agreed price schedule, against service requests and purchase orders.

How long they run

• The Offtake Agreement terminates once the JV becomes operational and able to meet Pirelli's demand; otherwise it is in effect until December 31, 2031, subject to mutual extension.
• The Service Agreement terminates automatically if the Framework Agreement or the Offtake Agreement is terminated before the JV Agreement is executed; otherwise it runs as long as the Offtake Agreement.

Other disclosures

• Pirelli is not a related party of the company and the transaction is not a related party transaction; the promoter, promoter group and group companies have no interest in Pirelli. The company holds no shareholding in Pirelli.
• Pirelli is part of a global tyre group with consolidated revenue of approximately EUR 6.78 billion for the financial year ended December 31, 2025.
• On impact on management or control of the company, the update states none; the restriction disclosed is the exclusivity described above.
• Stated rationale: for Pirelli, a step to build presence in a high-value tyre market; for the company, support for its expansion into the passenger car tyre segment, expected to create opportunities in domestic and international markets.

What to keep in mind

• The joint venture is proposed: the JV Agreement is yet to be executed, the JV is yet to be incorporated, and both are subject to conditions precedent.
• Separate disclosures are to be made when the JV Agreement is executed and the JV is incorporated.

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