Wheels India Ltd, a TVS Group company, is looking at various options to reduce promoters and promoter group stake in the company from the current 85.62 per cent.
Speaking at the 53rd annual general meeting, S Ram, chairman of Wheels India Ltd said the Indian promoter group had informed that it was looking at various options including raising equity to reduce the promoter shareholding.
“We are in discussion with our foreign shareholder, who has 35.9 per cent shares, and will take an appropriate decision. We have also informed the regulators that we do not intent to delist the company. Besides, we also want to raise capital,” said Ram.
According to the Securities and Exchange Board of India (Sebi), at least 25 per cent shareholding in the company should be with the public by June, 2013.
The promoters and the promoter group stake in the company is 85.62 per cent, including 35.91 per cent shareholding with foreign promoter, Titan Europe Plc. TV Sundaram Iyengar & Sons Ltd holds 24.88 per cent, Sundaram Finance Ltd 13.51 per cent and Southern Roadways Ltd 11.31 per cent in the promoter group as of June 2012, according to the BSE.
The company would reduce the shareholding within June, 2013, said Srivats Ram, managing director. He added there were options including raising equity or diluting stakes. An equity raising would help the company reduce its debt, though there were no plans ready.
The company would be investing Rs 70-80 crore during the current fiscal to complete some of the expansion plans, including capacity expansion in construction and mining equipment wheels. It expects the commercial vehicle market to show some growth in the later half of the financial year.
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However, the chairman said the company expects a negative growth in the medium and heavy commercial vehicles in the current year. It also expects the demand for light and small commercial vehicles for shorter distances and intra-city movement likely to grow though at a slower pace.
Even as car manufacturers are gearing up to meet the higher demand for diesel engines, the company said “the recent unfortunate developments at a major car manufacturer in India is a setback” and was likely to affect its production plan in the current year, unless the issues were resolved soon.