Force Motors' promoters increase stake as row with Bajajs ends
The promoters — Jaya Hind Investments and others — have bought 4.79 per cent stake from Bajaj Holdings, increasing their holding in the firm to 56.54 per cent.
As on December 31, 2013, Bajaj Holdings had a 19.48 per cent stake in the company. “The hike in promoter stake is on account of the resolution of a long pending issue with Bajaj Auto,” said Abhay Firodia, chairman of Force Motors. “This is part of an agreement between Force Motors’ promoters and Bajaj Auto, in which Bajaj Auto will reduce stake in the company.”
On Tuesday, its shares closed 15 per cent higher on the BSE at Rs 353.30. Firodia said he expects no change in the dynamics of the company’s business structure as excise duty on passenger carriers in the 9-13-seats segment was left unchanged at 24 per cent in Monday’s interim budget.
“We were looking at rationalisation in duty structure, but it seems the government has given quite a step-motherly treatment to passenger carriers in the 9-13-seating capacity segment, as less than 9 and more than 13-seat capacity passenger carriers attract less excise duty,” Firodia said.
“We do not see a recovery in volume unless the anomaly in duty structure in the passenger carrier segment is rectified.” In 2013-14, the company expects revenue closer to 2012-13 levels, given the slump in sales in key traveller segments.
Force Motors, however, sees an upside in the tractor segment and plans to sell 4,000 tractors in the 25hp segment in 2013-14. The automaker, which has an installed capacity of 6,000 tractors a year, plans to increase it to 12,000 from 2014-15.