Bosch buys 9.2 per cent more in Mico

Germany-based Robert Bosch, the world leader in diesel technology, has increased its stake in its Indian subsidiary, Motor Industries Company (Mico), by 9.2 per cent for Rs 1,300 crore.

The company had earlier made an open offer for 20 per cent stake in Mico for Rs 4,000 a share in May. This was followed by a revised offer of Rs 4,600 a share in the following month, possibly triggered by poor market response.

The company was able to acquire only 9.2 per cent from the open offer, taking the total promoters stake to 70 per cent from 60.8 per cent.

Albert Hieronimus, managing director, Mico, said, "The promoters were able to hike their stake only to 70 per cent through the recently concluded open offer."

However, the company has no plans to get delisted from the stock market, as according to Hieronimus, parent company Bosch has no intentions to raise thier stake beyond 80 per cent. "Our aim is to have an 80 per cent stake in both our companies (the other company being Bosch Chassis Systems) and not to get delisted," added Hieronimus.

In the recent past, there was a buzz in the market that the many multinational companies were seeking to delist from the stock markets through gradual hike in their promoters' stake. Engineering company Wartsila was one of the recent ones to get delisted from the Bombay Stock Exchange (BSE) through this way.

There was also a market buzz that Mico would come out with another open offer, which would carry a share price of Rs 5,000. This would have pegged the total buyback size to ovre $800 million, thus making it one of the largest buyback ever in history.

For the rest 10 per cent (which takes parent company share to 80 per cent), the company is unlikely to come out with a revised open offer in the near future.

Mico today announced the rollout of the first indigenous common rail injector from its newly set up plant in Nashik, set up at a cost of Rs 500 crore. The plant will produce 3.5 million injectors by 2010, sales of which will be largely restricted to the domestic market. The company had signed a memorandum of understading (MoU) with the Maharashtra government in November 2005. Hieronimus added that India had a very high growth potential for diesel technology, making it a very favourable destination for future investments.

The company is looking to grow extensively in the country with through greenfield and brownfield expansions. The company recorded a decline of 32.34 per cent in net profit for the quarter ended June 30, 2007, at Rs 164.25 crore compared with Rs 242.78 crore posted in the corresponding quarter of the previous financial year.

Total income, however, has risen by 18.20 per cent at Rs 1,100.44 crore as against Rs 930.99 crore reported on June 30, 2006.