Last year, Ford announced that it was exiting from the Indian market on account of accumulated operatin losses worth $2 billion over the last decade. This served as a great shock to the Indian automobile industry, but it was an opportunity for Tata Motors.
Ever since Ford exited India, it was speculated that the Tata group wanted to take over its manufacturing plant. In fact, Tata Motors also has a plant in Sanand, fairly close to Ford’s plant. This purchase would help Tata Motors increase production as its sales has seen a substantial rise recently.
Both the companies have submitted the proposal for transfer of ownership and if all goes well, the takeover of the plant will be complete by next week. This is positive news for the stock which hasn’t been performing very well. It closed at Rs 433.80 per share recently.
Highlight by Aman Agarwal.