Sharda Motor Industries is doing pretty well today morning, going up over 5.5% to Rs.1481.50; it has come off this high and is now at Rs.1461 levels, nevertheless, up over 4%.
The market is reacting positively to its after-market-hours announcement yesterday that it has entered into the 50:50 Joint Venture (JV) Agreement with Eberspaecher Exhaust Technology International GmbH (EET) for Business Development of BS VI Norms in Commercial Vehicle segment in India also.
In future, in order to comply with the highest emission standard Bharat Stage VI, the new joint venture will develop, produce and sell exhaust aftertreatment systems for Indian commercial vehicle manufacturers. The products will be utilized in trucks and buses from 2020 onwards.
This news apart, the bigger news is the decision of its Board to get into a Memorandum of Family Settlements (MOFS), which will help end the ongoing disputes between Ajay Relan, Rohit Relan and Sharda Relan and bring the focus back on the core business segments of automotive exhaust system and other automotive components.
Under the MOFS, Sharda Motors will demerge the seating business units of the company into a new wholly-owned subsidiary of the company.
As per the scheme, the entire shareholding of Sharda Motors in Bharat Seats, Toyota Boshoku Relan India and Toyo Sharda is to be transferred to the wholly-owned subsidiary of the company. The shareholding of 25.19% owned by Rohit Relan will be transferred as a gift or otherwise to Ajay Relan.
Rohit Relan Family Group will operationally control the automobile seating business units and Ajay Relan Family Group will continue to control and manage Sharda Motors.