Indian Auto Component Companies On Backfoot In Europe & US Over High Valuations
Indian auto component companies are likely to go slow in making foreign acquisitions. The reason: European and American firms are quoting higher valuations. So leading auto component companies like Amtek Auto and Omax are believed to have cooled off their plans for acquisitions. Amtek Auto is believed to have cash reserves of about $300 million for acquisition.
An article in The Hindu Business Line quotes A.K. Taneja, President, Auto Component Manufacturers Association (ACMA), saying that there had been a spike in interest from a number of domestic auto component firms eyeing overseas purchases. Besides, Chinese companies are also looking at acquisitions in Europe. This is driving up valuations. Apparently, the European companies are quoting at 10-12 times the EBITDA rather than the traditional 5-8 times. Because of high valuations, some Indian companies are believed to have dropped out of the race to acquire Turkish components major Doktas. [Via The Hindu Business Line]
