Mahindra International Limited, a subsidiary of the Rs 18,000-crore (Rs 180-billion) Mahindra & Mahindra Group, has joined a clutch of global automobile majors in the race to buy a strategic stake in Delhi-based Eicher Motors, said sources close to the development.
Eicher had announced in July this year that it was interested in an alliance or a strategic partnership to become a full-range commercial vehicle player. It currently makes light and medium trucks. MIL makes only heavy trucks.
MIL is a 51:49 joint venture between M&M and US-based International Truck and Engine Corporation.
When contacted, Pawan Goenka, president (automotive sector), M&M, declined to comment.
Other companies that are interested in Eicher include Volvo and DaimlerChrysler.
An Eicher Motors executive declined to provide details of potential buyers. The executive, however, said the promoters -- the Lal family -- were open to diluting their stake but not to becoming minority holders.
"We are trying to build the Eicher brand name in India but we won't do it by selling a majority stake," the executive said. The Lal family holds 61 per cent in the company.
Eicher generated revenues of nearly Rs 2,000 crore (Rs 20 billion) in 2006-07. It aims to grab a large share of the Rs 30,000-crore (Rs 300 billion) heavy trucks market, an exclusive preserve of Tata Motors and Ashok Leyland.
The alliance with MIL will enable Eicher to leverage ITEC's expertise in building high-end engines and manufacturing high-capacity trucks used mainly in construction, an area Eicher Motors lags.
News of an imminent change in ownership pushed the Eicher stock in a falling Mumbai market today to its 52-week high of Rs 510 on the Bombay Stock Exchange. The stock closed at Rs 493.40, 15.2 per cent higher than yesterday's close of Rs 451.
