TVS Group's Sundaram Clayton to raise funds

CHENNAI: Sundaram Clayton, part of the TVS Group and holding company for Venu Srinivasan-owned TVS Motor, said it would be raising funds through placement of shares to qualified institutional statement, in order to meet the 25% public float norm.

As of December, the promoter and promoter group own 80% in the company. Market regulator SEBI has fixed June this year as the deadline for companies to meet with the 25% public float norm.

Sundaram Clayton, which makes aluminum castings for automobiles, posted a 98% drop in third-quarter net profit to Rs 0.36 crore from Rs 15.82 crore in the comparable period last year, due to lower sales and higher finance cost. Net sales dropped 4% to Rs 241.20 crore from Rs 252.85 crore last year.

The company's finance cost soared more than 10 times to Rs 10.37 crore in the October-December quarter from Rs 0.95 crore in the comparable period.

Last year, the company had a proposal to demerge its non auto business, which also meant a de facto distancing between Venu Srinivasan and his brother Gopal Srinivasan, scions of one of south India's most prominent business families.