The share of Maharashtra Scooters Ltd (MSL) today hit its 52-week high of Rs 51.90 on the National Stock Exchange (NSE) on rumours that Bajaj Auto was keen to acquire the state government's stake in the company. More than 2 lakh shares changed hands on the Bombay Stock Exchange and NSE.
Maharashtra Scooters, which manufactures scooters under the brand name of Priya, is jointly promoted by the Western Maharashtra Development Corporation and Bajaj Auto. The Maharashtra government holds 27 per cent stake, while 24 percent is held by Bajaj Auto.
MSL has a plant at Satara having an installed capacity of 150,000 units. The company manufacturers three brands of scooters, after sourcing completely-knocked-down kits from Bajaj Auto.
While MSL's sales have dropped significantly during the year, the company has managed to report profit during the second and third quarters after registering losses during the first quarter. But the profits are largely due to other income.
MSL had clocked sales of Rs 200 crore in FY2001. Sales have, however, faltered in the current year. The company has a total investment of Rs 135 crore, of which the quoted equity, that is, its investment in Bajaj Auto is about Rs 82 crore. The current value of the investment is around Rs 166 crore and the total value of investments works out to about Rs 200 a share. The acquisition of the government's stake by Bajaj Auto should act as a trigger as it should eventually lead to a merger with Bajaj Auto, analysts said.
