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M&M seeks to buy Lokesh Machines

by:QY Precision      2019-08-28
Rs 18,000 auto giant Mahindra & Mahindra plans to acquire India\'s largest engine Lokesh Machine Co. , Ltd.
Block manufacturer.
Hyderabad: 18,000 rupees auto giant Mahindra & Mahindra plans to acquire Lokesh machine Ltd, India\'s largest engine-
Block manufacturer.
M & M has approached management in Hyderabad
The company aims to acquire more than 51% shares.
Buying Lokesh, with a turnover of Rs 113 in the previous fiscal year, will provide M & M with a reliable and exclusive supply of gas blocks and engine heads for Jeeps, tractors and Scorpio multi-function vehicles.
M. Lokeswara Rao, general manager, declined to discuss the issue.
M & M could not be reached for comment.
Lokesh supplies about 2.
The three lakh engine blocks of M & M cars account for 35% of its business.
Considering that Lokeshwara Rao, along with former Hyundai Motor India president B V R Subbu, started a car business called MLR Motors, M & M\'s move triggered some
MLR is setting up a factory of Rs 1,250 in nearby Medchel to produce passenger cars and commercial vehicles, eventually competing with M & M\'s own products.
For M & M, the move will be in line with the sales target of its actively expanding auto parts division, asiech --
By 2010, it will reach $1 billion, up 33% from current revenue.
Citigroup analysts said in a recent report that such targets may be more through acquisitions than organic channels.
After significant acquisitions in India and abroad, alcoech\'s current annualized revenue is $0. 75 billion.
It is a fully integrated \"part art\" auto parts supplier of M & M group.
Founded in 2004 to cope with the growing competitive power of the industry, the company\'s customers include domestic and international companies such as Tata Motors in India, General Motors and Ford in the United States.
Dadabhoy and Goel said that it seems that tricech is following the strategies of companies such as Bharat Forge and Amtek Auto, which gain customer share through acquisitions and expand the technology curve.
\"We believe that in the long run, the auto parts business will also cater to Mahindra-
Renault joint venture and Mahindra-
In addition to providing outsourcing opportunities, Navistar alliance will provide it (aramech) with a huge monopoly market in India, \"said Dada BOI and Goel of Citigroup.
However, it is still unclear whether Lokesh, which also serves other auto giants such as Ashok Leyland, and the Rao and promoter groups with a nearly 68% stake, will sell out, the company has set up a separate line for this purpose.
Starting in about 40,000 blocks, Lokesh has now raised Ashok Leyland\'s capacity to more than 1 lakh per year.
Industry insiders say Ashok Leyland may not be too friendly with M & M becoming a majority owner of Lokesh.
However, the source added that a solution could be to peel off the Ashok Leyland Line, which serves at least eight other major automakers.
Interestingly, it is understood that Ashok Leyland has begun to plan to build a car forging unit next to the upcoming MLR car factory.
Founded in 1984 by Rao, a former employee of Hindustan Machine Tools, Lokesh has three special-purpose machine tools, CNC machine tools, and automotive parts departments.
It went public in April 2006 and as of March 31, 2007 it had 33% floating shares.
Lokesh\'s stock closed at Rs 125.
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