Punjab-based International Tractors Ltd (ITL), the manufacturer of the Sonalika brand, is in talks to sell a 10 per cent stake to private equity players for around Rs 450 crore.

“The fund will be used to fuel production capacity and acquire an overseas company. We are in talks with a couple of private equity funds and will reach a final agreement soon,” the Sonalika Group Chairman, Mr L.D. Mittal, told PTI.

ITL has an installed capacity of 60,000 tractors a year. “We want to scale it up to 1 lakh within two years,” he said.

The tractor-maker, one of the top three domestic players, is close to acquiring a tractor firm in Europe for Rs 200 crore, he said.

“The deal is almost finalised,” Mr Mittal said, adding that the acquisition will happen after divestment of 10 per cent of the promoters' holding in ITL.

ITL is a part of the Rs 5,000 crore Sonalika Group. It manufacturers a wide range of tractors in the 20-HP to 90-HP segment.

The company aims to increase its market share to 12 per cent in the domestic market from 10 per cent at present. It sold 45,000 units last year and plans to sell 50,000 units this fiscal.

It clocked revenues of Rs 2,000 crore last fiscal and is eyeing a Rs 2,500 crore revenue this fiscal, Mr Mittal said.

The company also plans to set up a manufacturing facility in the South and has earmarked an investment of Rs 100 crore next year.

“We want to increase our sales in the South. The new facility will cater to the southern markets,” he said.

The company has proposed to set up the new tractor facility on 25 acres of land, with an installed annual production capacity of 30,000 tractors.

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