Ruia in Talks to Purchase German Auto Parts Maker

India’s Ruia Group is reportedly “close” to purchasing a German automotive component company, and may route any agreed transaction through its listed Falcon Tyres subsidiary. Group chairman Pawan Kumar Ruia states that Falcon Tyres will raise around Rs 8 billion (£111.6 million) by way of fresh shares through a rights issue, equity convertible warrant or other means to fund its expansion programme of overseas acquisitions and capacity expansion at home.

“We are pursuing acquisition plans aggressively and are dose to the deal but are yet to finalise the terms of the transaction,” Ruia said. The name of the German firm in the company’s acquisitions sights has not been disclosed, however Ruia commented its purchase can be seen as being part of a strategy to consolidate the Group’s operations in the automotive sector and look for new following its unsuccessful bid for Korean vehicle manufacturer Ssangyong.

Plans are also in place to increase capacity at Falcon Tyres’ Mysore factory, which is located in India’s Karnataka state and to invest in a new greenfield facility. Output at Mysore is to rise 50 per cent to 1.5 million tyres per month, with most of the new capacity directed towards the popular motorcycle and scooter segment. The greenfield plant, to be built in Haridwar, Uttarakhand state, will produce two and three-wheeler tyres, with a large proportion of production going to nearby located motorcycle manufacturer Hero Honda.