Slovakian firm Tatravagonka is spearheading merger of the wagon and castings making arms of the Kolkata-based Jupiter Group owned by the Lohia family
Tatravagonka AS of Slovakia is set to play a major role in the domestic wagon industry, where foreign entities have little presence.
After picking up a minority 26% stake each in Jupiter Wagons and Jupiter Alloys and Steel, the Slovakian firm is spearheading merger of the wagon and castings making arms of the Kolkata-based Jupiter Group owned by the Lohia family.
Jupiter Wagons, which makes wagons and fabricated bogies, and Jupiter Allloys and Steel, which makes wagon components and casting materials, have now filed for merger of the two entities before NCLT.
The merger would result in Tatravagonka holding 26% in the combined entity and there is commitment from the Slovak firm to raise its stake substantially once the process is over.
Already reeling under low and occasionally delayed order flow from the Railways, Indian wagon makers like Texmaco and Titagarh would now face a bigger threat from a foreign player having cutting-edge technology and footprint across Germany, Switzerland, France, Russia and Poland.
Due to unreliable customer like Indian Railways and poor demand from private sector, foreign direct investment eluded the wagon industry till 2015 when Tatravagonka picked up a minor 13% stake in Jupiter group.
In the same year, Tatravagonka acquired 66.67% in Polish entity ZNTK Paterek, and 100% ownership in OAO Saranskij of Russia, both companies focusing on repair and reconstruction of railway locomotives and wagons.
The 13% stake in Jupiter firms was quickly raised to 26% in 2016 and the proposed merger is precursor to the raising of stake of Tatravagonka in the merged entity to 50%.
Jupiter is fast making its presence felt in the market for supplies to the Indian Railways and has already started cornering respectable share of yearly wagon orders.
Of the last distributed order for 2,500 wagons earlier this year, Jupiter cornered 1,300 or half of the procurement done by the Railways.
The tender for 9,500 wagons that was suppose to open in July-end, has not been declared yet and is likely to be announced early next month.
While the proposed merger has been supported by the creditors, there's a minor glitch as the Registrar of Companies has raised the issue of absence of Reserve Bank of India and Foreign Investment Promotion Board approval for the merger involving a foreign partner.
"It is, however, observed that both the amalgamating and the amalgamated company have a foreign investor Tatravagonka AS, a foreign body corporate holding 26% shares in each and is proposed that it shall have 26% shares in the amalgamated company... The company has not stated whether the scheme of amalgamation and the consequent change in shareholding has been intimated to RBI/FIPB. NCLT may kindly decide the above matter in its own merit," regional director of eastern region of Registrar of Companies has asked the tribunal.
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- Slovakian firm Tatravagonka is spearheading merger of the wagon and castings making arms of the Kolkata-based Jupiter Group owned by the Lohia family
- The proposed merger is precursor to the raising of stake of Tatravagonka in the merged entity to 50%
- Jupiter is fast making its presence felt in the market for supplies to the Indian Railways and has already started cornering respectable share of yearly wagon orders
- Of the last distributed order for 2,500 wagons earlier this year, Jupiter cornered 1,300 or half of the procurement done by the Railways
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 "Wagon industry")
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