IT major Wipro’s promoter Azim Premji is investing Rs 80 crore to acquire a significant minority stake in a company floated by Jagdish Khattar, former managing director of Maruti Suzuki India who has recently turned entrepreneur.
Khattar, who floated Carnation Auto, has planned an investment of Rs 1,000 crore in the next five years to launch a countrywide multi-brand automobile sales and service network.
Besides Premji, who will invest in the company through his investment fund PremjiInvest, IFCI Ventures has also committed Rs 28 crore to the company, for a minority stake. Khattar joins the growing club of auto professionals who are turning entrepreneurs.
This club includes BVR Subbu, former president of Hyundai Motors India Ltd, who set up Argentum Motors to contract-manufacture for large carmakers. Subbu has also floated another company, Altius Autoworld, in a joint venture with Japanese giant Gulliver International to provide after-sales service for luxury cars and heavy commercial vehicles.
For Premji, Carnation makes his second investment within a couple of weeks. He had bought 10 per cent in low-cost retail chain Subhiksha for around Rs 230 crore.
Carnation Auto will be launching its service and sales network hubs in 100 locations in 65 cities in the next five years.
“By the end of this financial year, we will be launching at least half-a-dozen auto solution hubs in the National Capital Region, Hyderabad and Cochin. In the next financial year, we plan to launch 25 to 30 such hubs across India,” Khattar, who is chairman and managing director of Carnation Auto, said.
These multi-brand sales and service hubs are mostly targetted at new automobile manufacturers, especially those with limited market share and capacity constraints.