By IANS,
Rajkot : Rajkot-based Atul Auto Ltd, a manufacturer of goods and passenger carriers, has decided to allot half a million equity shares of Rs.10 each at a premium on preferential basis to part finance its diversification plans.
The company will manufacture rear-engine three-wheelers at an estimated cost of Rs.2,700 million.
In a statement filed before the Bombay Stock Exchange, it said the premium will be decided according to the Securities and Exchange Board of India (SEBI) guidelines on the matter.
The shares will be issued in one or more trenches. Shareholders approved the issue at an extra-ordinary general meeting in April this year.
J.J. Chandra, managing director of the company, said: “It is proper, looking into the global competition, to diversify the business operations of the company in new line.”
“On account of change in design of the rear-engine three-wheelers, the entire process of manufacturing of external body is undergoing a change. The proceeds of the preferential allotment will be one of the means of contribution for this project,” he added.
Atul Auto was promoted in 1986 with a capital of Rs.2,000. In 2006, the latest year for which data is available, the company achieved a turnover of Rs.1.68 billion.
The company pioneered motorized rural transport in Gujarat, with its multi-purpose vehicle Khushbu.
In 2001, the company identified a niche market in the three-wheeler segment. It launched Atul Shakti and by 2006 60,000 vehicles were sold with the company registering a 9.4 percent market share in its category in the diesel-run three-wheeler segment.
The vehicle is now exported to countries like Egypt, Nigeria, Kenya and Tanzania.
Also on the company’s drawing board is a plan to roll out a four-wheeler utility vehicle with the lowest price tag, company sources said.