Atul Auto, which is keen to buy Government's stake in Scooters India, has said the public sector unit's estimated market capitalisation is higher at Rs 160 crore.
Atul Auto said its own financials and performance were stronger despite a market cap of Rs 80 crore.
In a statement, Mr Vijay Kedia, Director, Atul Auto, said it is the “best” suitor to Scooters India. While Scooters India manufactures only front-engine vehicles, Atul Auto makes both front and rear-engine vehicles.
The company, awaiting guidelines from the Government, will conduct due diligence to determine a “fair valuation” of Scooters India. “If valuation is fair in our view, then we will go for it,” he added. Mr Kedia said for valuation purposes merchant bankers preferred either market price or market capitalisation at the stock exchanges. Market capitalisation is one of the indicators but it can be misleading too, he said.
In 2010-2011, the company produced 19,000 vehicles and plans to manufacture 27,000 this year, compared to Scooters' 16,500. It has also set up an assembly plant in Bangladesh.
Although Scooters India has a big chunk of land, it has liabilities of more than Rs 100 crore. A voluntary retirement scheme is expected to cost another Rs 50-100 crore.
In the nine months ended December 2010, the debt was Rs 55 crore, against Atul Auto's Rs 10 crore and the latter will be almost debt-free this year, he added.