Wheels India Ltd is looking at various options to reduce the promoters and promoter group stake in the company from the current level of 85.62%. The Indian promoter group has informed that it is looking at various options including raising equity to reduce the promoter shareholding, said S Ram, chairman, Wheels India Ltd.
Speaking to shareholders in the 53rd Annual General Meeting (AGM) of the company, he said that the company has no intention to delist. “We are in discussion with our foreign shareholder, who has 35.9% 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.
As per a decision from Securities and Exchange Board of India (Sebi), at least 25% shareholding in the company should be with the public, within June, 2013.
According to the data available with the Bombay Stock Exchange (BSE), the promoters and the promoter group stake in the company is 85.62%, including 35.91% share holding with the foreign promoter, Titan Europe Plc. TV Sundaram Iyengar & Sons Ltd holds 24.88% shares, Sundaram Finance Ltd holds 13.51% shares and Southern Roadways Ltd has 11.31% shares in the promoter group, according to the data filed with BSE by end of June 30, 2012.
The company would reduce the promoters and promoter group share holding as per the mandate within June, 2013, said Srivats Ram, managing director of the company. He added that there are options including raising equity or diluting stakes available with the company to do this. An equity raising would help the company to reduce its debt, though there are no plans ready, he added.
The company would be investing around 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 is expecting the commercial vehicle market to show some growth in the later half of the financial year.
However, the chairman said that 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 is likely to grow though in a slower pace than the past.
Even as the car manufacturers are gearing up to meet the higher demand for diesel engines, the company also raised concerns that “the recent unfortunte developments at a major car manufacturer in India is a set back” and is likely to affect its production plan in the current year, unless the issues are not resolved soon.
