Mitsubishi Corporation of Japan will increase its stake in the city-based TVS Automobile Solutions Pvt. Ltd. (TASL), an independent aftermarket player, from 3% to 25%, said company officials.
“We have entered into a strategic partnership with Mitsubishi Corporation,” said R. Dinesh, director, TVS Automobile Solutions. “Our target is to double the overall business in two-to-three years.”
The fresh round of funding by Mitsubishi was done partly through buying of shares from undisclosed existing shareholders and partly through subscription to fresh equity. Though the exact investment in the current round was not disclosed, Mitsubishi overall investment in TASL was over ₹250 crore, according to Mr. Dinesh.
He said the funds would be deployed to drive the future growth of TASL.
“Though, we have been in touch with each other for more than nine years, Mitsubishi invested in our company last year. Totally, the investment is over ₹250 crore. The latest funding is subject to approvals from regulatory authorities and Competition Commission of India (CCI). None of the existing investors is making an exit,” he said.
‘A win-win situation’
Asserting that the partnership with Mitsubishi was a proof that TASL could grow in other overseas market, Mr. Dinesh said it was a win-win situation with the Japanese firm getting an opportunity to grow parts business in the Indian aftermarket space. The success could be easily replicated in other markets such as the U.S. and Africa. Currently, these two firms would focus on West Asia and African countries.
On the strategic tie-up, he said that Mitsubishi was present in many countries and had significant speed advantage.
“Instead of three countries, with Mitsubishi’s speed and presence in existing and overseas markets, I can now enter 20 countries,” Mr. Dinesh added.
“This is an important partnership between two great organisations. We are a long-term player. We have been in the business since 1954. Today, we have over 1,500 subsidiaries in 90 countries with 200 business offices,” said S. Wakabayashi, senior vice-president, Mitsubishi Corporation.
TASL ended FY19 with a revenue of ₹1,300 crore, an increase of 35% over FY18. This year, it plans to touch ₹1,800 crore. Mr. Dinesh said that overseas market accounted for more than ₹400 crore and it was set to grow from next fiscal.