3i to take equity stake in the Sonalika companies
Mumbai: 3i, world leading venture capital and private equity company, today announced that it would take a ten per cent stake in both International Tractors (ITL) and International Cars & Motors Ltd. (ICML). Both companies are part of the Sonalika Group, which is owned by the Mittal family and has over 25 years of experience in manufacturing tractors, farm machines & automobiles.
ITL is the third largest tractor manufacturer in the country and the most profitable company in the industry. Other shareholders in ITL are the US$ 2 billion Yanmar Group, Japan's leading tractor manufacturer, with a 12 per cent holding and CVCI, Citigroup's Venture capital arm, which has a 10 per cent stake.
ICML has recently launched a multi purpose vehicle (MUV), "Rhino", which has received an enthusiastic response in India. With an installed capacity of 24,000 MUVs per year, ICML now intends to export the Rhino to Nepal, Malaysia, Indonesia and African countries.
Announcing the partnership with 3i, Mr. L.D. Mittal, Chairman of the Sonalika Group said, "We are happy to have 3i as our equity partner. Through its global experience and network, 3i will add significant value and enhance the growth of our companies."
Commenting on the transaction, Mr. Anil Ahuja, Managing Director, 3i India said, "We at 3i are excited and strongly believe in the growth potential of the Sonalika Group and are committed to supporting Sonalika achieve a market leadership position. We believe they are rightly placed to become a reference point in the Indian automotive industry."
Notes to editors
About Sonalika Group
Sonalika group has played a very vital role in the farm mechanisation in India as well as in some developing countries. Their contribution to the green revolution of India has added a very important chapter in the history of Indian agriculture. After producing high tech agriculture implements, they ventured into tractors 10 years back and due to the high quality and superb performance of Sonalika tractors they have left behind most of the tractor manufacturers in the Indian tractor Industry and have become one of the top three tractor manufacturers in India. Today Sonalika group's International Tractors Ltd. has become the fastest growing tractor company in the world.
They have recently introduced Multi Utility Vehicle RHINO which has taken the Indian car industry by storm since it was first displayed in Delhi Auto Expo 2006. RHINO has been developed with technical support from MG Rover of England.
The plant of their car unit International Cars & Motors Ltd. is situated in Himachal Pradesh which has been declared a tax free zone. Accordingly there will be no Excise duty or Income tax for a period of 10 years. It has been decided by the management of Sonalika Group to pass on all the tax benefits to customers, thus making RHINO the most affordable SUV in India in addition to its being a very fuel efficient and comfortable vehicle.
3i is a world leader in private equity and venture capital. We focus on Buyouts, Growth Capital and Venture Capital and invest across Europe, in the United States and in Asia Pacific. Our competitive advantage comes from our international network and the strength and breadth of our relationships in business. These underpin the value that we deliver to our portfolio and to our shareholders.
3i's Growth Capital business focuses on investing minority stakes in high growth companies expanding organically or through acquisition. The business currently manages 300 investments across Europe and Asia with a value in excess of €1.8bn and invests across a broad range of industry sectors, including healthcare, business services, consumer, media, technology and oil, gas and power.