Pricol MD says no intention to sell stake, no synergy in working with Minda

Minda Corp is looking to invest Rs 400 crore in Pricol to acquire the stake, sources said. The transaction will consist of a base book for 10.8 percent with an upsize option of an additional 4.9 percent.

A book is generally launched when a company is looking to sell a stake. In this case, the transaction is being done through reverse book building as the stake is likely to be purchased from the open market.

Sources also said that Minda Corp is looking to acquire the stake in Pricol at Rs 209 per share, which is around the same price as Thursday's closing.

Speaking of the proposed transaction, Mohan said that he was made aware of the same last night and has countermeasures to take on Minda Corp in case of a hostile move from the latter.

"We have zero long-term debt and why would we sell when we are on the growth curve?" Mohan said. "1,000 percent sure that I won't sell. We are doing very well. Why would I sell? It is not a question of price."

Mohan also spoke about the company's business, saying they have the building blocks for growth in place along with the necessary technology. "We've signed up three technology agreements with leading global companies from Silicon Valley and Europe, which will further help hone our product offerings," he said, adding that the company has a very strong order book and has also seen a rise in market share.

In an interaction with CNBC-TV18 in December, Minda Corp Executive Director Aakash Minda said that the company is in talks with a couple of players for partnerships as well as M&A activity and that the key to inorganic growth will be synergies.

Pricol MD Mohan said that the company would not like to work with Minda Corp as they are competition and he sees no synergies in a deal with the latter. Mohan also said that Pricol has taken market share away from Minda.

"We are on a very solid footing with regard to our instrument cluster business, driver information, automotive electronics business, which is the only business that they compete with us in our portfolio of businesses. So I don't see any synergy in working with them," he said.

Mohan also believes that the worst for the company in terms of margin is behind them in terms of the shortage of IC components or child parts as well as the premium freight rates they have been paying which eroded margin. "In the coming quarters, it should only get better for us. And I think we would be able to maintain this growth rate, if not better it," he said.

While Mohan did not give specific guidance, he said that the company would be able to maintain the 20 percent growth rate for the next financial year.

Shares of Pricol are trading 0.3 percent higher at Rs 209.