Eicher Motors shares zoomed ahead on reports that European automobile major Volvo is in advanced negotiations to acquire majority stake in the company.
According to reports, Volvo has offered Rs 675 per share against competitor Daimler's Rs 500. The deal price translates into a market capitalisation of around Rs 2,000 crore for Eicher Motors.
This is way above Eicher's current market price of Rs 480 per share and market capitalisation of Rs 1,200 crore. A key reason for such a high valuation is that global truck makers are looking at India as a significant growth market.
Volvo is expected to acquire majority stake in the company either from the promoters or through fresh issue of shares trough the preferential route. The promoters currently hold 61.76 per cent in the company. This includes 3.56 per cent indirectly owned by DaimlerChrysler. (ET)