Lumax Industries is merging its group company Laser Lamps in the ratio of 1:5, that is one share of Lumax for every five shares of Laser Lamps.
After the merger, the equity of Lumax Industries will increase by Rs 1.13 crore to around Rs 7.8 crore.
Laser Lamps, which has its manufacturing facility at Gurgaon, produces auto lighting equipment including halogen bulbs.
It was promoted by Lumax Industries with equity participation by the Haryana State Industrial Development Corporation.
However, prior to this merger, the equity of HSIDC was bought over by Lumax.
Lumax Industries manufactures lighting systems, filters and rear-view mirrors.
The companys major buyers are car manufacturers, two-wheelers and commercial vehicles.
With 85 per cent of the production going to the original equipment (OE) segment, Lumax has six manufacturing facilities located close to major automobile producing centres.
These units located at Faridabad, Delhi, Pune, Aurangabad and Gurgaon cater to clients like PAL, Hindustan Motors, Telco, Ashok Leyland, Bajaj Auto, Bajaj Tempo, TAFE and Maruti.
Lumax recently issued additional shares in favour of its technical collaborator Stanley Electric of Japan, which is a subsidiary of Honda, Japan.
This will raise the latters stake from the current 11.12 per cent to 20 per cent.
With this, the equity will increase by about Rs 75 lakh.
According to KV Vijayan, Lumaxs company secretary, the main reason behind the merger was to obtain synergy in operations as both the companies are in the same line of business.
Also, the merger would benefit Laser Lamps as it has no technical support, which can now avail the expertise and technical support from Stanley Electric.
At present, Lumax is setting up a Rs 30-crore greenfield unit at Dharuhera to produce lighting systems for new generation cars like Uno, Maruti 800CC, Telcos Safari and Mini car and Kinetic Honda.
The Dharuhera unit is expected to become operational in February 1998. Lumax also plans to consolidate its existing domestic business lines.
It plans to pass on the rear-view mirrors business to its 50:50 joint venture with Ficosa of Spain.
However, it will retain the filters business. Lumax has entered into a technical collaboration with Toyo Roki, Japan to help improve the quality of existing products and add new types of filters like fuel filters and air bath cleaners to cater to a wider range of products.
This would allow Lumax to tap a broader field in the auto segment with the entry of foreign majors into the country.
Lumax Industries has an ongoing financial and technical collaboration with Stanley Electric, Japan .
The main reason behind the merger is to obtain synergy in operations as both the companies are in the same line of business
