Date:03/08/2006 URL: http://www.thehindubusinessline.com/2006/08/03/stories/2006080302050300.htm

Back Ruia Group may buy Monotona Tyre

Pratim Ranjan Bose

Kolkata , Aug. 2

The Kolkata-based Ruia Group is exploring the possibility of a bid to acquire the Mumbai-based Monotona Tyre Ltd (MTL). According to a company Web site, MTL manufactures close to three lakh two and three-wheeler tyres and tubes and is an OE supplier to Bajaj Auto, LML and Kinetic.

While the Ruia Group did not answer queries on the issue, a MTL official denied finalisation of any such transaction.

Industry sources, however, reveal that Ruia Group, which had already acquired Dunlop India Ltd and Falcon Tyres, is in an advanced stage of negotiation with Monotona Group for acquiring MTL.

The acquisition may be made either through Falcon Tyres — which is a prominent player in two and three-wheeler tyres and tube market — or through any investment arm of the Ruia Group.

A privately held company, MTL has reportedly registered a turnover of over Rs 150 crore and net profit of over Rs 5 crore during the last fiscal. Apart from domestic sales, the company exports to South America, West Asia, Africa, Sri Lanka and Bangladesh.

According to sources, the acquisition, if comes through, may increase Ruia Group's control over two and three-wheeler tyres market to about 32 per cent by the end of this fiscal.

It may be mentioned that after enhancing the capacity of Falcon Tyres from 3.5 lakh tyres to 5.5 lakh tyres during the last fiscal, Ruia Group has already embarked on a Rs 80-crore project to expand the capacities to 7.5 lakh pieces by December.