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Fiat hikes stake in Ind Auto to 93%

Our Bureau

MUMBAI, March 7

FIAT India Automobiles Ltd (FIAL), the 100 per cent-owned investment arm of Italy's Fiat Auto, has increased its equity stake in the city-based Ind Auto Ltd (IAL) from 76 per cent to 93 per cent.

This is through fresh equity infusion of Rs. 160 crores, a majority of which will go towards higher localisation of engine and dies. No fresh approval from the Foreign Investment Promotion Board (FIPB) is required, as Fiat already has permission to hike stake in IAL to 100 per cent.

The authorised share capital of IAL has been raised from Rs. 1,000 crores to Rs. 2,000 crores.

With today's announcement of 93 per cent equity holding, IAL's name has been changed to Fiat India Ltd (FIL). Also, in furtherance of the September 1999 shift of the Fiat Siena as an additional product to IAL, the company today said,

`` IAL will now manage all car operations of Fiat in India.''

Earlier, FIAL was both the investing arm of Fiat Auto and the body responsible for its Ranjangaon project seeking to manufacture Project 178 vehicles (i.e., Fiat's Palio, Siena, Siena Weekend and a pick-up version). IAL was begun as a 51:49 joint venture between Fiat and Premier Automobiles Ltd (PAL), making the Fiat Uno.

Once 100 per cent equity ownership is reached at FIL, Fiat Auto is most likely to merge FIAL and FIL in line with what it had announced some time ago, of wanting a single operating company in India. That arrangement is also considered as best from the pe rspective of supporting the Fiat brand locally.

Top management of FIL continues as before with Mr. Vinod Doshi as non-operative Chairman and Mr. Maitreya Doshi as a whole-time Director. Mr. G. Ravina is the company's Managing Director.

`` We may reconsider investing in the joint venture at a future date,'' Mr. Maitreya Doshi said in an official press release on the subject.