BackM&M, Atul Auto eye controlling stake in Scooters India
M&M, Atul Auto eye controlling stake in Scooters India
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Mumbai: Utility vehicles maker Mahindra & Mahindra and three-wheeler maker Atul Auto Ltd are separately interested in acquiring a majority stake in state-run Scooters India Ltd, two sources in Mahindra and a senior official in Atul Auto said on Monday.
Government plans to offer upto 74% stake in Scooters India, the Hindu Business Line newspaper reported earlier this month, citing unnamed government sources.
Scooters India, in which the government owns about 95%, reported a Rs22 croreloss in the fiscal year ending March 2010, according to data on the BSE.
The company which sold two wheelers under the brands Vijai Super and Lambretta, discontinued two-wheeler production in 1997.
Mahindra, which has signed a preliminary agreement for acquiring Korean automaker Ssangyong Motor, is looking at it to add to its three-wheeler portfolio, the company sources said.
A spokeswoman for Mahindra said the firm would not comment on speculation.
The tractor maker, which has about 11% market share in the three-wheeler segment, last year launched Gio, an upgraded version of its three-wheeler products with the intention of making inroads into the semi-urban market.
Atul Auto which makes similar products as Scooters India, intends to invest in the latter’s technology and expand capacity, Vijay Kedia director at Atul Auto told Reuters. Lucknow-based Scooters has an annual capacity of around 12,000 units annually.
“Our plan is to revive the company with our expertise as we have similiar products," Kedia said.
Atul Auto does not have plans to clear liabilities of Scooters India, which amount to around Rs100 crore billion rupees, Kedia said.
Scooters India officials were not available for comments when contacted by Reuters.
Atul, which has sold about 5,300 vehicles so far in 2010-11, is expecting a 50% sales growth this year on volume expansion as demand for three wheelers rise, Kedia added.
The three wheeler market has grown about 18% during the first four months of the current fiscal year with sales of 150,526 units so far.
A total of about 60 state-owned firms have been identified in which the government will be selling stake.
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