Baron International is also planning to make an initial public offer (IPO) of upto 25 per cent stake by June this year, Baron International chairperson Shakun Mulchandani said here on Monday.

Baron and Aiwa further announced that they were extending their strategic alliance for a further period of four years, in addition to the original agreed term of five years. Effectively, the alliance has been extended till 2007.

Both these arrangements were finalised in Tokyo last month.

Addressing a press conference here, Aiwa chairman Kenji Tamiya said this was the first time that the Japanese company had decided to pick up stake in venture overseas.

Describing investment as ``promising,'' Tamiya said, he expected ``will to bear rich dividend in theforeseeable future.'' He added it was unprecedented decision for Aiwa. ``We seldom participate in equity arrangement.''

Aiwa will also depute a nominee to the board of Baron International to ``ensure Aiwa's policy and product strategy is better understood and enhance mutual understanding and cooperation.''

Speaking to The Financial Express, Baron International managing director Kabir Mulchandani said that Aiwa might pick a further stake in the company at a later stage, particularly when Baron goes for an initial public offer or placement of share to financial resources.

Tamiya said Aiwa might consider picking up additional stake in the company if Baron made an offer. He, however, added that the Japanese company did not consider it neccessary to acquire additional holding in the company.

The IPO would effectively bring down the shareholding of the Mulchandani family to about 55 per cent. At present, the family holds about 70 per cent stake in the company, while the balance is held by banks andfinancial companies. The company has a paid-up capital of Rs 15.45 crore.

Meanwhile, Baron group has implemented a small restructuring of the companies in its fold. Baron Electronics, a company which had originally entered into strategic alliance with Aiwa, has been made a fully-owned subsidiary of Baron International. The alliance with Aiwa has been shifted to Baron International, Kabir Mulchandani said.

The company had reported turnover of Rs 850 crore during the calender year 1999. It was targeting a turnover of Rs 6,000 crore by 2007, Mulchandani added.