Sona group plans to set up driving school

As a part of diversification plans, Gurgaon-based Sona Group, manufacturer of steering and driveline components for the automotive sector, is planning to foray into driving schools.

Also, its subsidiary Sixt India, engaged in providing car rental services to big corporates, would launch its services in Pune, Hyderabad and Chennai soon. Besides that the group has chalked out expansion plan worth Rs 600 crore for its group company namely Sona Koyo Steering Systems Ltd and Sona Okegawa.

Also, the group has plans to set up new unit in Singur (West Bangal). Speaking to Business Standard, chairman and managing director of the company Surinder Kapur said, "The opening up of the driving school would act as a backward integration for our car rental services, besides training other drivers. Initially we would open our school near Mumbai."

Commenting on Sona Koyo's ( which is joint venture company of Sona Group and Koyo Seiko Co of Japan) expansion plans, he added, "We would invest Rs 400 crore in the company which includes expanding the current manufacturing capacity and setting up new unit and acquisition overseas. We would set up a new unit in Uttarakhand, with an initial investment of Rs 50 crore. So far the funding part is concerned it would be through internal accurals, term loan from banks, etc.

When asked about acquisition in overseas, he said, "One of our objectives is that we need to have organic growth. So we are looking at overseas for acquisition. However, we need to first realise the whole objective of going in for more acquisitions."

The group is planning to raise capital through private placement of its equities with JM Financial Services. Initially it would invest Rs 120 crore and add another Rs 40 crore soon taking the total to Rs 160 crore. He further added that the group has plans to put up new unit Singur (West Bengal).

He said, "We would invest Rs 200 crore in Sona Okegawa precision Forgings Ltd, which is engaged in manufacturing of precision forged product. While Rs 70 crore will be through equity by the promoters while the balance will be through internal accruals and debt. Sona Okegawa has plans to put up new unit in Pune, with an initial investment of Rs 80 crore.

Kapur said he is planning to increase his personal stake in Sona Koyo to 25 per cent from 17 per cent whereas in Sona Okegawa it would be increased from 61 per cent to 75 per cent.

In last financial year, the turnover of the company was Rs 800 crore and this year it is hoping to touch Rs 1,000 crore.

Expressing his plans for Sixt India, he added, "We have plans to add another fleet of 1,000 cars and planning to extend our services to other cities like Pune, Hyderabad and Chennai."