Fiat, through 100 per cent subsidiary Fiat India Automobiles Ltd (FIAL), pumped in additional Rs 250 crore in the form of subscription to equity and preference shares to increase its holding from 51 per cent and consequently, changed the joint venture's name to Fiat Ind Auto Ltd (FIL) to leverage on its global brand equity.

Fiat sources said subject to regulatory and government approvals, it proposes to transfer all operations related to its world car project `178' from FIAL to FIL having a 50,000 units per annum capacity plant at Kurla in north-east Mumbai.

FIAL will remain Fiat's holding company for administration activities in India including the development of greenfield plant at Ranjangaon in Pune district.

With infusion of fresh capital inaddition to Rs 700 crore already invested in India by Fiat, the equity of FIL has been raised from Rs 65 crore to Rs 133 crore.

Reflecting change in equity holding which resulted in PAL's stake getting diluted from 49 per cent to 24 per cent, FIL board has been reconstituted with Maitreya Doshi being redesignated as a wholetime director from his earlier position as managing director of the joint venture, according to a Fiat release here on Monday.

Doshi said dilution in PAL's equity is not unusual as automobile business requires huge investments and similar situations have taken place in the case of Tata Benz, Mahindra Ford, Honda Siel, GM Birlas, DCM Daewoo and Toyota Kirloskar.

"The dilution, done in the interest of PAL shareholders, would enable us to concentrate on the revival of the PAL-Peugeot Ltd's plant at Kalyan in Thane district, in which PAL has substantial stake and needs management attention," he said.

PAL had transferred the Kurla plant as its 49 per cent equity in the joint venture withFiat, with a provision that premier Padmini cars would be manufactured at the plant as and when required.

PAL-Peugeot plant is closed for sometime and the French auto major Peugeot has pulled out of the venture leaving it for the Doshis of PAL to decide on the joint venture's future.