The Hindu Business Line : NK Minda Group to supply auto parts for Rs 1 lakh Tata car

Bangalore April 18 The NK Minda Group will supply auto parts for the Rs 1 lakh small car project of the Tatas even as it looks to shed up to 22 per cent stake to raise around Rs 250 crore.

The Minda Group has also floated a joint venture with a leading European company, Valeo, in which the Indian company has picked up a 37 per cent stake. The rest is with the Valeo Group. The total investment in the company is around Rs 100 crore.

The Minda Group's Managing Director, Mr Nirmal K. Minda, told Business Line that his company has signed a letter of intent with Tata Motors for supply of parts such as switches and horns for the Rs 1 lakh small car. Tata Motors is expected to launch its small car in 2009.

Raising funds

Mr Minda said the company is planning to raise around Rs 250 crore through the private equity route. The total investment over the next few years is expected to be about Rs 600 crore. He said the publicly listed Minda Industries would be willing to shed up to 22 per cent stake to raise funds for expansion of its company. The public holding in Minda Industries is around 27 per cent.

Mr Minda said his group is taking several steps to upgrade its plants in the country to match the quality of international vendors. "We expect more international vendors to set up their plants in the country, as their customers like Nissan and Renault are setting up huge plants here. Hence, competition among auto parts' suppliers will intensify," he said.

The group has earmarked about 4 per cent of its annual turnover towards investing in R&D as well as focussing on acquiring companies abroad. "Such acquisitions will give us access to world class technology, which is extremely important for us to compete globally," he pointed out.

The N K Minda Group also has a tie up with the Ashok Minda Group for collaborating together in overseas projects. The Minda Group formally split in 1996 with brothers, Nirmal and Ashok forming separate companies.

During the third quarter of 2006-07, MIL posted a 14.25 per cent increase in net profit to Rs 4.11 crore while sales grew 44.76 per cent to Rs 97.55 crore.

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