Buzzing stock: Force Motors enters into JV with Rolls Royce

Force Motors Ltd., a Pune-based auto firm on Tuesday informed that it has entered into joint venture agreement with Rolls-Royce Power Systems AG to produce engines for power generation and rail application and complete power generation systems, including spare parts, for Indian and global markets.

With this joint venture, Force Motors would foray into the non-automotive segment. The company will hold 51 per cent stake and Rolls Royce will hold the remaining i.e. 49 per cent stake in the JV.

The two firms will invest Rs 300 crore from now till start of the production. The plant will be operational by the first quarter of FY19.

This announcement led the stock to surge by 3.9 per cent to close at Rs 4,223.85 on Tuesday. Today, it opened at Rs 4,238 and has touched intra-day high of Rs 4,250. But it has closed at Rs 4,151.25.

Force Motors is an auto company which produces engines for two of the leading European premium car makers Mercedes and BMW. It also sells Traveller and Trax vehicles, which are market leaders in their respective segments. Whereas, Rolls Royce Power Systems produces high speed engines and propulsion systems for ships, power generation, heavy land, rail and defence vehicles.