Coimbatore-based Pricol Ltd shares settled in the red on Thursday, January 4, albeit recovering from the day's low as it informed bourses that the competition regulator will probe the Pricol-Minda merger.
"We have received a communication dated 03rd January 2024 from CCI. CCI has upon consideration of the captioned matter communicated its decision that prima facie, the proposed combination by Minda is likely to result in an appreciable adverse effect on competition for multiple reasons, that therefore CCI intends to conduct further inquiry into the matter to address the potential harm to competition. Further, CCI has directed the parties to respond as to why investigation in respect of the proposed combination should not be conducted," the automotive components and precision engineering firm informed in an exchange filing.
Pricol also said that it will submit its response to the Competition Commission of India (CCI) in due course.
In mid-May 2023, Pricol filed an objection with the CCI against Minda Corporation over the acquisition of a 24.5% stake in the company. Pricol had also moved the Madras High Court, challenging the validity of the application of Minda Corp.
Minda Corp. acquired a 15.70% stake in Pricol via an open market transaction for around ₹400 crore in February 2023. In May of the same year, it sought the CCI nod to buy a 24.5% stake in rival Pricol.
The promoter family of Pricol, led by its Chairman Vanitha Mohan and Managing Director Vikram Mohan, holds 36.53% in the company and has often stated that they had no intention to sell their holdings.
Pricol is Minda's main rival in the two-wheeler instrument cluster business. Pricol reportedly has a 40–50% share in the category, while Minda holds a 15% share.
Pricol share price settled at ₹371.95, down 0.72% at the closing. The day's low came in at ₹366.15.
