Pricol, a Coimbatore-based driver information systems maker, has filed an objection with the competition regulator to block Minda Corp’s move to buy up to 24.5% in the company, Pricol told stock exchanges on Wednesday.
Minda Corp filed an application with the Competition Competition of India (CCI) to get clearance to acquire a 24.5% stake in Pricol, which is a leading manufacturer of instrument clusters in India, while Minda has a much smaller share of the market.
In February, Minda bought a 15.7% stake in Pricol for ₹400 crore in a surprise move that triggered a confrontation with the promoter group of the target company led by managing director Vikram Mohan.
“We have filed a preliminary objection against the Minda Corporation Ltd’s (Minda) application to the Competition Commission of India for making an investment in equity shares of Pricol Ltd up to 24.5% of total equity shares of Pricol while also reserving the right to challenge in detail on merits at the appropriate stage,” the company said in a stock exchange filing.
Mohan had told analysts in its recent fourth-quarter earnings call that the company will take all legal measures to oppose Minda Corp’s CCI application to acquire a 25% stake in Pricol as they are competition. “We do not intend to give up control in favour of Minda Corp. and will use every financial and legal remedies available to us,” Mohan had said.
Pricol is Minda’s largest rival in the two-wheeler instrument cluster business. The deal may lead to further consolidation in the instrument clusters market, where Pricol has a 40-50% share, with Minda holding 15%. Uno Minda’s move to take control of Pricol is the first-of-its-kind attempt by a domestic supplier to take on another domestic rival in the automotive components industry.
Private equity firm Phi Capital owns nearly 6% of Pricol, as well as 5% in Minda. This could allow Minda to enhance its stake in Pricol if Phi Capital chooses to sell. Promoters led by Mohan have a 36.53% stake in Pricol. The rest is held by the public, including banks.