Hot news – August 2007
* Chennai-based Tractors and Farm Equipment (TAFE), India’s second-largest tractor manufacturer, is eyeing a big-ticket acquisition in Europe.TAFE is eyeing Yugoslavian tractor majors Industrija Masina Traktora and Industrija Motora Rakovica, one of the largest tractor makers in Serbia. TAFE is aiming at acquiring majority stake in both the firms, and could also go in for a 100% buyout, as both enjoy major marketshare in East Europe. If it goes through the deal, TAFE would have to fork out around Rs 1,000 crore. Both companies have a production capacity of around 25,000 units each. The last acquisition by TAFE was of Delhi-based Eicher tractors in 2005 for Rs 310 crore. TAFE holds around 23% marketshare in the domestic tractor market.
* Maruti Suzuki has announced a special offer to increase its sales and to counter impact of high interest on sales. The offer named “Smile India Smile” offer, which runs from Aug 1-15, offers discounts ranging from 7,000-30,000 rupees on several models, including its best-selling Alto and the Esteem sedan.
* Tata Motors is setting up the largest fully-built bus plant in the world, which will make it one of the leading global bus manufacturers. Tata Motors has identified Karnataka and Goa as possible locations for the proposed facility, but is yet to finalise the location. The proposed plant is likely to come up in 2008. Tata is chasing a sales target of 50,000-60,000 passenger carriers in the next few years to emerge the largest player in terms of units, ahead of leading bus manufacturers like DailmerChrysler and Volvo
* NDTV profit reported Tata and Mahindra may enter a swap deal under which Mahindra which has been on a buying spree for scaling up his auto components business is believed to have turned his attention to Tata group’s auto components arm, Tata Auto Component Systems or TACO. It is learned that Mahindras are said to be in negotiations with the Tata group’s top brass to take control of TACO. Mahindra & Mahindra’s (M&M) auto component business is pegged at close to Rs 3,000 crore and TACO with revenues of close to Rs 2,800 crore will almost double M&M’s ancillary business.
The interesting twist in the deal is Tatas could take charge of the Mahindra group’s IT flagship Tech Mahindra in lieu of giving up control over the auto components company. While Anand Mahindra denies any plans to let go of Tech Mahindra, merchant banking sources claim that the negotiations are currently on over valuations and the deal could be routed through Tata Consultancy Services (TCS). Tech Mahindra has a market cap of around Rs 16,000 crore with M&M’s stake valued at over Rs 6,000 crore. Valuation of the closely held TACO, on the other hand, is pegged at around Rs 3,000 crore, if a deal finally materialises, Tatas will pay up for the difference. For More
* Mahindra is planing to invest around Rs 60 crore to set up six ‘FirstChoice’ stores, the company’s first multi-brand used car superstores, in the next 15-18 months. FirstChoice is a three-way joint venture between Mahindra Group, HDFC and Sah and Sanghi. Mahindra group will hold a 75 per cent stake in the venture. Mahindra’s existing used car subsidiary Automartindia Ltd has been renamed ‘FirstChoice’ and Mahindra palns to expand this new initiative to more than 200 stores in next 2-3 years. Maruti similar intitative “true value intitiative” sells around 75000 cars a year and Tata motors is also planning to enter this robust used car market.
* TVS Motor Company has decided to launch 11 new models by April 2008. The new product line includes motorcycles in both the entry level and the high-volume executive segment, a scooterette and an electric scooter, besides two-stroke and four-stroke three-wheelers. Of the 11 new products TVS announced seven two wheelers, a two-stroke and four-stroke three-wheelers is for the Indian market and two for Indonesia. With the proposed launch of 11 products, TVS wishes to flex its muscles as it said “The investments we made in quality and technology will be put on actual display from now on”.
* Founders of truck maker Eicher Motors Ltd are exploring selling their majority holding to a global commercial vehicle maker. Though international truck makers Daimler and Hyundai Motor were eyeing a stake in Eicher, Daimler which already holds a 3.56 per cent indirect stake in the company, is tipped to be the front runner. The very important isssue is Royal Enfield India’s only cult bike maker is a subsidiary of Eicher. Is Royal Enfield will change hands? we have to wait!