Tuesday November 24, 7:29 PM
India's Tata 'eyeing stake in rival vehicle maker'
India's largest carmaker Tata Motors is considering buying a stake in truck and bus manufacturer Swaraj Mazda, a report said Tuesday.
The auto giant is looking at buying the 17 percent stake from private equity firm Actis, according to the Economic Times business daily, citing people familiar with the matter.
Actis owns a 7.7 percent direct stake in Swaraj and 9.3 percent through its parent CDC.
A spokesperson for Tata Motors said the report was "purely speculative" while Actis' India head, J.M. Trivedi, refused to comment, the Economic Times reported on its website.
Swaraj Mazda makes buses, trucks and ambulances for the Indian market and is majority owned by Japan-based Sumitomo Corporation, which raised its shareholding to 53.5 percent this year.
Actis is a private equity firm focused on emerging markets, with more than 4.8 billion dollars under management, according to its website.
"The Tatas might eventually eye buying out Sumitomo's stake in Swaraj," a local auto analyst said on condition of anonymity.
Tata Motors has a 63 percent market share in India's commercial vehicle sector, which could rise to about 65 percent if it got a controlling stake in Swaraj.
Swaraj Mazda's share in the vehicles market fell to 1.8 percent in the April-October period this year, from 2.2 percent for the same period a year earlier.
Swaraj Mazda shares rose as much as 9.3 percent or 24.65 rupees during the day to 289.9 at the Mumbai stock exchange, before retracing on profit-taking to 273.05 rupees, up 7.8 rupees or 2.94 percent.
Tata Motors bought British luxury brands Jaguar and Land Rover from US Ford Motor last year for 2.3 billion dollars. In 2004, Tata Motors had bought out South Korean truck maker Daewoo Commercial Vehicles.
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