Tyre-maker Ceat plans to raise Rs. 250-300 cr.

Automotive tyre manufacturer Ceat plans to raise Rs. 250-300 crore from private equity firms, and has mandated Kotak Investment Banking as advisor.

The company will use the proceeds for expanding its off-roading products portfolio, sources close to the development said.

'The plans are in the early stages and it would be difficult to say the exact quantum the company intends to raise. The final quantum of funds would depend on the investor interest and market conditions,' one of the sources told BusinessLine.

'There is a lot of investor interest, while it would be difficult to provide a timeline for the fund-raising,' another source said.

The sources, who declined to be identified before a formal announcement, did not divulge the names of the PE firms the company was in talks with. They also did not reveal the stake the tyre manufacturer would be offloading in return for the funding. Both Ceat and Kotak did not respond to a set of questions mailed to them recently till the time of going to the press.

In November, Ceat, the flagship company of RPG Group, had raised Rs. 400 crore through a stake sale to institutions.

The company had said it would use the proceeds of the qualified institutional placement (QIP) for capacity expansion at its Halol plant in Gujarat, and for its two-wheeler tyre project, among others. In October, Ceat said it would invest Rs. 470 crore to enhance its tyre manufacturing capacity and Rs. 420 crore for setting up a plant to make two and three-wheeler tyres with a capacity of 120 tonnes a day.


HBL