NEW DELHI: After managing India�s largest passenger car company for 14 years, Jagdish Khattar, former Maruti MD, announced his foray into the organis
ed multi-brand car sales and service business with an investment of Rs 1,000 crore over the next five years.
The new company�Carnation Auto India Ltd�is backed by Rs 80-crore investment from Wipro chairman Azim Premji�s PremjiInvest and Rs 28 crore from IFCI Venture Capital Funds.
Although Mr Khattar refused to comment on the specific stake sale, sources said the two jointly hold around 25-30% equity in the company. Carnation Auto is valued at around Rs 300-350 crore, with Khattar holding the majority stake. Sources say another minority dilution may also be due in the near future.
Carnation Auto plans to launch a pan-India service and sales network at 100 locations in 65 different cities over the next five years. It will be working partly on the franchise model and partly through joint venture.
Jagdish Khattar, CMD of the new company, said: �We plan to set up about six outlets in the National Capital Region, Hyderabad and Cochin, and take it up to 30 by the next year. We have three locations in hand and will be developing them to make them operational. We plan to develop one-stop auto solution hubs catering to all needs�maintenance, insurance, CNG/LPG retrofitment, accessories�of different brands of cars under one roof.�
The company is also in advance discussions with some leading automobile manufacturers for strategic partnerships to provide service backup.
Besides, it will also set up a wholly-owned infrastructure company, Carnation Realty, for developing real estate and lease it back to the parent firm. Carnation Reality will execute plans with various reality companies to develop new outlets, multi-brand showrooms and automobile hubs.
�Our realty company will go for buying land as real estate is a key part of our business model. We are negotiating with several real estate companies in different states to develop properties for commercial use. Some locations have already been identified in different states,� Mr Khattar added.
Carnation is also planning to set up an automotive training institute to develop support staff for the automobile industry and impart skill development. It will be working with the government, OEMs and other industrial bodies to develop a manpower pool for its own business and for the industry.
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