It is believed that Sumitomo has sought Foreign Investment Promotion Board (FIPB) approval for the same.

A top Sumitomo official confirmed that the Japanese major desires to hike the stake in the company and necessary approvals have been sought. The official, however, refused to divulge the exact stake of Sumitomo.

However, institutional sources said the current stake of Sumitomo in the company is around 25 per cent which will be hiked to 50.

The share price of Motherson Sumi which has been languishing at Rs 27 in the BSE shot up to Rs 107 on rumours of Japanese major's plan to raise the stake. This phenomenal rise in the price has come about in nearly two months and the scrip has witnessed heavy volumes during the same period.

Motherson Sumi, initially incorporated a a private limited company, became public in the year 1987. The company, an original equipment manufacturing supplier, has plants in Noida and New Delhi. It also has a joint venture with an Italian company for the manufacture of car alarms. The company also has a technical alliance with Wilhelm Prudenz.

It is believed that the company is one among the very few companies which had retired the high cost debt with cheaper debt.

Sumitomo Corporation has extensive global network with hundreds of subsidiaries all over the world. It has 162 offices in 82 countries. In India too, the Japanese giant has significant holdings in various companies.

Sumitomo's role in the Indian companies where it has a stake is mainly technical guidance apart from providing raw materials. Also, the company is perceived to be gradually increasing its stake in some companies. For instance, Sumitomo which began with a meager 5 per cent stake in 1993 in the Mumbai-based Hikel Chemical has enhanced it to 15 per cent in 1995. The corporation also has a member in Hikel's board.

Sumitomo Corporation, founded in 1919, is capitalised at about $1.4 billion with net sales amounting to $94 billion in 1999. While the Corporation's focus remains on trade and business investment, it has increasingly been providing greater emphasis on enviornmental business which include technolgy for recycling wastepaper, plastics etc.