Falcon Tyres, a Ruia Group company to raise Rs 100 crore

Falcon Tyres, a Ruia Group company that manufactures two- and three-wheeler tyres, is exploring various options to raise Rs 100 crore as part of its expansion plans.

Pawan Ruia, chairman of the Ruia Group, which also owns wagons manufacturer Jessop and tyre company Dunlop India, told DNA that several instruments for raising the funds were being considered, including foreign currency convertible bonds (FCCBs), global depository receipts (GDRs) and a qualified institutional placement (QIP).

“We need Rs 300 crore to expand Falcon’s capacity from 90 lakh units per month and Monotona’s capacity from 1.25 million units per month to a combined 1.7 million units per month,” Ruia said.
Of this, Ruia added, almost Rs 150 crore has been tied up in loans. Another Rs 50 crore still remains to be tied up. “The balance Rs 100 crore is to be raised through one of these options — FCCB, GDR or a QIP”.

Monotona is a subsidiary of Falcon.

Ruia also ruled out merging Dunlop and Falcon because, he said, both were players in different categories. Dunlop will be operating in the bus, truck and four-wheeler segments. It is also exploring industrial products like belts, steel cords belts etc. Falcon, in turn, is a niche player in two and three-wheeler tyre market, Ruia said.

Dunlop India, meanwhile, made its debut on the BSE after a long gap. It had last traded in 2002. There were several issues, including the non-payment of listing fees, that came in the way of the listing of the shares.

Currently, 4.55 crore shares have been allowed for trading. While the promoters hold 74% in the company, 12% is with LIC and the rest with the public. Around 2.7 crore shares had been issued as a rights issue.

Trading on bourses in Delhi, Chennai, Ahmedabad and Kolkata will resume in a week, Ruia said.