Minda acquires significant stake in Pricol. Sparks hostile takeover buzz.

Minda Corporation has acquired 15.70% stake in Pricol through open market transactions.

  • Shares have been acquired @ Rs 209/ share, similar to the current prevailing price.
  • The amount spent on acquisition is Rs 400 cr

Did Pricol promoters also sold any shares?

Promoters held 36.53% stake in Pricol as at December 31, 2022. Of the balance – 16.86% was held by institutions and 46.61% by public.

Promoters have categorically denied any stake sale and reiterated their commitment towards the Company.

Minda itself has informed that the stake purchase is a pure financial investment. It would not get any special rights in Pricol.

What’s the purpose of the stake acquisition by Minda?

Though Minda has described the current purchase as a financial investment, that’s how a bigger strategic move normally starts.

Pricol has established a strong presence in some businesses where Minda is aiming to grow.

Analog clusters in the driver information systems are now moving towards digital clusters with integrated telematics and ADAS systems. Minda is moving from a mechanical cluster to incorporate the latest TFT (thin film transistor) digital cluster where Pricol has a strong position with its own R&D and technological capabilities.

Pricol also showcased its range of EV-ready products at the Auto Expo 2023 and it was recently recognised with a Top 50 Innovative Companies award by the CII. Pricol claims its portfolio is now EV agnostic.

All above is perhaps what makes Pricol attractive to Minda, which is looking to play catch-up with its larger peers.

So is Pricol’s control by Minda is a given and it’s only a matter of time?

Difficult to comment at this stage.

Pricol’s promoters don’t seem to be wanting to cave in easily.

Minda though is twice the size of Pricol – @ Rs 4900 cr market cap, it’s not someone with huge financial muscle.

Does this transaction make Minda or Pricol interesting to invest?

Not to me.

At this stage, I would instead continue to look at standalone businesses for my investment decision.

Notify of
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x