Scooters India Ltd (SIL), the 39-year old Lucknow-based public sector firm, is awaiting a parliamentary rescue after the firm — whose main contribution to Indian roads is the ubiquitous small-town passenger vehicle Vikram and yesteryear brand Lambretta — ran up losses, triggering a plan for privatisation.
Ambitiously launched in 1972 in the fledgling phase of country’s automotive manufacturing, SIL pulled out Lambretta scooters from the market in 1997 and slipped into losses since 2003.
The government is likely to seek nod to offload its entire 95% stake in Scooters India in the monsoon session of Parliament beginning August 1, sources said. Once it gets Parliament’s nod, the Department of Disinvestment will come out with a global tender for identifying a strategic partner to revive SIL.
After getting a green signal from Parliament it might take six months for the disinvestment process to complete, sources said.
The privatisation of SIL generated interest ever since the ministry of heavy industries began seeking strategic partner for SIL.
Shares of the company, which were trading at around R23 a year ago, has shot up to R40-45 following the government’s move induct a private partner. The share price touched a new high of R53.9 in May this year, following the Cabinet decision to offload the entire government stake in the company. However, no auto players except Rajkot-based Atul Auto have shown interest in buying SIL.
SIL’s ageing workforce, old technologies and about R120-crore debt make SIL unattractive for buyers. However, its land assets of around 100 acres, the brand value of Vikram and sales network are the positives.