CDC open offer to buy 25% in Swaraj Mazda

CDC group's holding may go up to 40%.

CDC Agribusiness Management and South Asia Regional Fund today announced an open offer to acquire a 25 per cent stake in the Chandigarh-based commercial vehicles maker, Swaraj Mazda, at Rs 315 a share. The offer is 2 per cent higher than the closing price of the stock on the BSE today.

The CDC group's current holding in Swaraj Mazda stands close to 15 per cent and it can go up to 40 per cent if the offer is fully subscribed.

Under the Securities and Exchange Board of India's takeover code, an investor is required to make an open offer for at least 20 per cent once its stake in a company touches 15 per cent.

In a notice to the stock exchanges today, ICICI Securities, the manager of the offer, said CDC Agribusiness Management and South Asia Regional Fund, along with others, had made an open offer to purchase a maximum of 26,21,675 fully paid-up shares of Swaraj Mazda, representing 25 per cent in the company.

The list of companies includes CDC Financial Services (Mauritius), CDC-PTL Holdings, CDC Group, Actis India Investments LP, Actis India Fund 2, LP and Actis South Asia Fund. The offer is not conditional upon any minimum level of acceptance. It will open on November 23 and will close on December 13.

The CDC group got an entry into Swaraj Mazda through its acquisition of the Punjab government's 24 per cent stake in Punjab Tractors last year. Punjab Tractors is the Indian promoter of Swaraj Mazda with a 29.04 per cent stake.

The foreign promoters of Swaraj Mazda include Mazda Motor and Sumitomo Corporation, which hold 15.62 per cent and 10.41 per cent in the company, respectively.

Punjab Tractors, along with Swaraj Mazda and Swaraj Engines, was among a clutch of related ventures promoted by the Punjab government in the 1970s and 1980s.

Swaraj Mazda is a small player in the commercial vehicles market in India. The company, for the first five months of this financial year, sold close to 4,700 units of light, medium and heavy commercial vehicles, representing a little over 4 per cent of the 11,2850 commercial vehicles sold in the country.

The company's Nawanshahar plant has an installed capacity of 12,000 units per annum.