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Rediff.com  » Business » 3i buys 10% in Sonalika arms

3i buys 10% in Sonalika arms

Last updated on: April 06, 2006 11:39 IST

3i Group, a private equity investor, has picked up 10 per cent equity each in International Tractors and International Cars & Motors. ITL and ICML are owned by Hoshiarpur-based Sonalika group.

Sources close to the deal said 3i Group made a total investment of Rs 225 to 300 crore in the two companies.

Anil Ahuja, managing partner and country head, 3i India, said the investments in the tractor and car companies of Sonalika are worth looking at, as "we find the Indian auto space very promising both in the domestic sector and exports".

"ITL is the third-largest tractor company in India, with 35-40 per cent growth achieved in the last few years. And we expect attractive returns from our investment. We anticipate a similar growth from ICML as well," Ahuja added.

The acquisition in the Sonalika group companies is the second deal that 3i has closed in India. 3i, a world leader in private equity and venture capital, entered the domestic market with a $45 million investment in Nimbus Communications — the country's only company with business interests in media, entertainment and sports. 3i's investment in Nimbus is the largest ever private equity investment in the domestic media and entertainment industry.

ITL, which achieved almost 100 per cent growth in the first two years of its establishment against the tractor industry's average annual growth rate of about 6 per cent, has doubled its production.

The company signed an MoU with a French auto major for manufacturing French-designed tractors at its Hoshiarpur plant as well as for exporting Sonalika tractors to the Western countries by the French company.

The Sonalika group had also tied up with MG-Rover for manufacturing SUVs (sports utility vehicles) at Amb, a tax-free zone in Una district of Himachal Pradesh. The vehicles are manufactured under the banner of a newly formed company, International Cars & Motors Ltd.

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BS Corporate Bureau in Mumbai
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