Sundram Fasteners, it may be recalled, will be picking up controlling stake in Autolec Industries as a strategic investor. It will pick up a little over 50 per cent of the company's equity through market purchase, preferential allotment at Rs 60 per share and by open offer to the existing shareholders at Rs 82.50 per share.

Autolec, which is a leading manufacturer of water pumps, oil pumps, fuel pumps and other auto components, has a capacity of 1.4 million units. At current demand levels, about 85 per cent of the capacity is being used and there will be a need for additional capacity once the industry comes out of recession, signs of which are already showing, saidVasudevan.

Capacity could be expanded by adding a few balancing equipment, he said. He did not elaborate further on the extent of expansion as the final decision on utilising Rs 6.19 crore raised out of the preferential issue would be decided by the restructured board of the company when it meets in August.

Earlier at the EGM, the shareholders of Autolec Industries approved the preferential allotment of 10.31 lakh shares to Sundram Fasteners Ltd at a price which is higher than Rs 60 per share or as per the Sebi guidelines. The Autolec board will be reconstituted and Sundram Fasteners will appoint majority of the directors. Vasudevan will continue as chairman for two years while Balraj Vasudevan would remain as the managing director.