Tube Investments to buy 42% in Cholamandalam

Our Corporate Bureau

Chennai, Aug 28: TUBE Investment of India (TI), part of the Rs 3,600-crore Murugappa group, on Tuesday said it is picking up 41.80 per cent equity shares in Cholamandalam Investment and Finance Company (Cifco), another Murugappa group subsidiary, at a price of Rs 47 per equity share. The entry of TI into financial services would create growth opportunities for the company and improve its quality of earnings, Mr MV Subbiah, chairman, TI, said here in a press release. TI is one of the original promoters of Cifco and held two per cent of stakes in the financial service company prior to acquisition. As TI would acquire CIFCO shares from other Murugappa group companies, there would be no changes in the promoters holding in Cifco, the statement said.

Transfer of shares from the group companies inter se is exempted from Sebi takeover regulations. The acquisition of a maximum 71,06,046 shares would be made at a consideration of Rs 47 per share based on the valuation done by an independent agency, the statement said.

TI has so far bought 8,90,136 equity shares of Cifco from Parry Agro Industries Ltd and New Ambadi Investments Pvt Ltd. Shares from other group subsidiaries would be completed in the next couple of weeks, the statement said. The entry of TI into financial services through acquisition of Cholamandalam shares was approved by the board of directors of the company, which realises the company’s need to diversify its business portfolio and enter high growth areas.