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| Bajaj Holding ups stake in Force Motors to over 19% |
| Swaraj Baggonkar / Mumbai Mar 24, 2010, 00:57 IST |
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Bajaj Holding & Investment (BHIL), the listed holding company of the Bajaj Group, has increased its stake to almost a fifth of the Firodia-controlled Force Motors. Bajaj Holding bought 405,000 shares (3.07 per cent) of the Pune-based makers of light, medium and heavy duty trucks and buses in a block deal worth over Rs 14.20 crore, according to data with the Bombay Stock Exchange (BSE). With this deal, Bajaj’s holding in Force Motors increased to 19.31 per cent.
The stock of Force Motors gained nearly 18 per cent over the last three trading sessions on the BSE. It touched its 52-week high today before settling at Rs 405.35 at close of Tuesday’s trade. Since the start of this month, the stock has appreciated by 50 per cent.
 Bajaj Holding, which has stakes in Bajaj Auto (makers of two- and three-wheelers) and Bajaj Finserve (financial services), bought the shares from two entities – Anand Trading Company (204,682 shares) and Rishab Trading Company (200,318 shares) – at an average price of Rs 350.80 per share.
‘No further interest’ The company, however, does not have any intention of further increasing its holding in Force Motors, as Bajaj Group does not have any strategic plans for the stake.
BHIL Chairman Rahul Bajaj said: “It’s an internal rearrangement of shares, which has been going on for the last three weeks. Anand Trading Company and Rishab Trading Company are group partnerships by different names and are a part of the Bajaj Group. This is within the team. We are not adding any more shares of Force Motors to our holding. We have no interest in that company.” In fact, according to Bajaj, the stake could even be reduced in the future.
“We may even look at selling our stake (in Force Motors) tomorrow, but have no plans to scale up our holding,” he said.
The promoter group in Force Motors, which is made up of the Firodia family and group companies, owns nearly 52 per cent. Institutional investors hold just 2.17 per cent in the company, which has a joint venture (JV) with German commercial vehicle maker MAN for heavy trucks and buses. Force Motors hasn’t been able to make much headway in the domestic market despite the JV being more than six years old.
The JV was formed with the Indian player holding 70 per cent and the German player owning the balance stake. Subsequently, Force Motors sold 14.2 per cent equity to the German company in MAN-Force Trucks for Rs 300 crore in 2008. MAN further raised its stake to 50 per cent later.
‘No differences now’ The two families – Bajaj and Firodia – had fought pitched battles in court over the name of the Abhay Firodia-led Force Motors only five years ago, when it was known as Bajaj Tempo. The Bajaj Group had opposed the move to drop the name ‘Bajaj’. Still, Firodia rechristened the company Force Motors in 2005 after winning a court battle. Bajaj Auto had then held a 24 per cent stake in the company, which was largely a manufacturer of multi-utility vehicles and light commercial vehicles.
“We have been involved with the Firodia family since 1968. Our holding in that company dates back to over 30 years. Although we were involved a legal tussle a few years back, we have no differences now,” Bajaj said.
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