It was a no-brainer. What’s the viability of a company producing car air-conditioners only for Telco passenger cars such as Indica, Tata Sumo and Tata Safari? Not very much. But this is precisely what Voltas Air International — a Tata-AIG JV— has been doing. Well, perhaps not for long.
TACO, the auto components major in the Tata stable, is set to take over Voltas Air International. The acquisition talks are at an advanced stage. Some differences on price is what is holding up the finalisation of the deal. Voltas Air International is a 50:50 joint venture between Tata’s Voltas and AIG of Australia.
RP Paranjapey of Voltas Air International told ET that the company was, indeed, in talks with TACO for a possible sell out but there are differences between the two sides on the valuation of the company. "We are in talks, but no decision on the pricing has been arrived at yet," he said. The asking price is not known.
Voltas has been spurred to sell its joint venture mainly because of the low volumes which wasn’t making the project a very viable proposition. However, for TACO, which has several auto component joint ventures under its umbrella, the buy-out makes sense as it is a perfect fit in its products portfolio.
Voltas Air International has a paid-up equity capital of about Rs.11 crore and a turnover of around Rs.40 crore. It manufactures only non-CFC air-conditioners based on AIG technology, which are fitted in the deluxe versions of Tata Indica, Sumo and Safari.
The standard versions of Indica use CFC-based ACs manufactured by Subros. Voltas had set up the joint venture specially for the Telco vehicles since as it was only into landbased ACs and did not have the technology for mobile ACs. Mr. Paranjapey said the company is seeking to expand its focus and is trying to get out of its dependence on Telco purchases. It was in talks with non-Tata auto companies for supply of car ACs and was in the process of stepping up the scale of its operations.
He refused to give the names of the companies with which it is talking. The company was also branching out to the manufacturing of defence grade ACs, bus ACs and was in talks with the Railways for railway coach ACs. TACO, which has adopted the global trend of moving towards a tiered system, has structured its operations on a two-tiered set of joint ventures; Tier 1 joint ventures are technologically intensive and have partnerships with foreign companies while Tier 2 ventures are with Indian firms.