Leyland, M&M in race for PTL

The Hinduja flagship company, Ashok Leyland, along with utility vehicle maker Mahindra and Mahindra (M&M), is neck and neck in the race for Punjab Tractor (PTL).

Ashok Leyland, which has been planning to expand its base in the northern market, has reportedly quoted Rs 350 per share for PTL. Other companies in the race are Tata Motors and Sonalika Tractors, but their price offers are not known. The Delhi-based Escorts group has preferred to stay out of the contention.

According to sources, Askok Leyland has already started the due diligence at the PTL facility in Mohali in Punjab, while other companies are yet to begin the process. However, Ashok Leyland spokesperson refused to comment on the matter, saying the sensitive details of the transaction cannot be shared at present. The final date for PTL bid is March 15.

Analyst tracking the PTL development said both the companies (Ashok Leyland and M&M) could revise their call due to competitive bidding, as they had submitted non-binding bids. They, however, said share price of Rs 350 quoted by these companies was too steep for PTL.

"These companies have already bid a very high price for PTL, which does not carry such high capitalisation. PTL market share is continuously decreasing and the present valuation by the contenders is not very over-rated. Both the companies seem serious as tractor business would complement Ashok Leyland's business, while M&M would further consolidate its market leadership position in the tractor market," said Arvind Jain of Religare Securities.

The PTL share closed at Rs 319.60 on Thursday trading. The stock fell by Rs 0.45 over the trading price of Rs 320.05 on Wednesday.