Vinod Doshi Firms Plumb The Depth On Bourses
Disinterested FIIs and low volumes are causing the Vinod Doshi-controlled Premier group's stocks to plummet in the capital markets. "The group's main problem is lack of focus," is the refrain among FII analysts.
Except for a brief period in December 1996, the scrips of the three group majors, Premier Auto Electric (PAE), Premier Automobiles Ltd (PAL) and PAL-Peugeot have been continuously falling.
"We don't see any growth possibility. PAL still pursues with the age-old model of Fiat.
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Even the Peugeot model the joint venture makes lags far behind the contemporary Ford Escorts or Cielos as far as its snob value is concerned.
Now, while the Peugeot JV is in deep trouble, the group has gone in for yet another indiscriminate car venture with Fiat," they add. There is also a 76:24 joint venture with Magneti Marelli of the Fiat group for making auto components.
"The scrip movement is not in our hands. Both PAL-Peugeot and PAL have been adversely affected by a long industrial strike and understandably have performed below par. However, PAE is doing well and we are vexed as to why this scrip is not doing well.
We are beefing up production and this should get reflected in the scrip movements soon," top group sources told Business Standard.
While the group's auto components subsidiary Premier Auto Electric touched its 2-year low on Tuesday at Rs 25.50, flagship Premier Automobiles had touched a 2-year low of Rs 18 last week.
PAL-Peugeot, its beleagured joint venture with French multinational Autom-obile Peugeot, is quoting below par at Rs 5.50. Its 52-week low is Rs 5 and in the last one year had managed to reach a high of only Rs 11. While PAE reached around Rs 39 in November last year, PAL had touched Rs 28.
But, sales of all cars brought out by the group has increased over the past two months.
Sales of Premier Padmini increased to 1,503 in January as compared to 999 in the previous month.
Likewise, 118NE rose to 625 from 475, Fiat Uno to 48 from 5 and Peugeot 309 from 200 to 230 during the same period.
In both the new joint ventures, the Doshis have chosen to pick up a minority stake, 26 per cent with Fiat and 24 per cent with Magneti Marelli, a move that corporate observers feel is due to the group's lack of funds.
While Magneti Marelli was agreeable to a larger stake by the group, in the venture with Fiat the Doshis have kept the option open for raising their holding to 49 per cent at a later date.