With this deal, M&M will get a 14-per cent s5take in Swaraj Mazda and 33 per cent in Swaraj Engines.

M&M says that this deal would consolidate the company's position across India and help its exports, as PTL has an installed capacity for making 60,000 tractors and harvester combines. The company also said that the deal enhances shareholder value as PTL's products complement M&M's range.

Elaborating its future plans for PTL, Bharat Doshi, CFO, M&M, said that PTL's foundry capacity could be hiked to 20,000 tpa from 9,000 tpa currently.

He further adds that the M&M would use debt as well as cash to fund the acquisition, although they did not need to raise substantial debt.

CNBC - TV18 shares with domain-b its exclusive interview with Bharat Doshi:

Are you going to make an open offer for both Swaraj Engines and Swaraj Mazda now?
In Swaraj Mazda we will only get a 14-per cent stake when we acquire PTL. So at this juncture there is no question of an open offer for it, but we will definitely make an open offer for Swaraj Engines and another company, Swaraj Automotives, which makes seats, etc.

At what price will each of these open offers be?
That would be a separate question, we will come back on the detail but basically the PTL deal will be at Rs360, the other prices will be worked out depending on the date of the open offer and then you have to work backward with 14 days as well as looking at the transactions.

What do you expect to see by way of capacity addition the? Is there any debt that you would take on as well with this acquisition?
As far as the capacity is concerned Punjab Tractors' capacity is 60,000 tractors and they are making 30,000 tractors so there will be that capacity addition which would actually help us in our planning now in the sense that at M&M we were coming close to our capacity in terms of what we are producing so instead of adding new capacity somewhere this capacity could be a very useful synergy for us.

As for raising debt, you know that we have substantial surplus funds plus substantial debt raising ability. It is not necessary that we have to raise substantial debt, since we don't have to.
What we need to do is to work out the best mix.

What is the open offer price for Swaraj Engines subject to? Is it subject to how much you pick up in the open offer for PTL?
I cannot tell you today about the Swaraj Engines open offer price because I will have to go for 14-day average, etc, and would depend on the day when we make the open offer, so I cannot tell you the specific price.

Did you pay a little bit more than you would have ideally liked to pay because of the comparative element for Punjab Tractors?
You have always known us. As Mahindras we will work out whether it adds value for the shareholders and of course one would always be happy to pay a lower price but we would not want to pay a price higher than what creates value for the shareholders and that is what we have done.

How do you see the tractors market now? Interest rates have gone up, there is an apprehension of the growth that we have been seeing getting dented given that you are now operating with a much larger market share… do you have any such concerns?
The question is market is not likely to grow at the same type of rate as it was growing earlier because it was a smaller base but we do expect considering what the present pull is and it all depends on how interest rates move further.

But it is not interest rates which deters the farmers. It is the availability of credit and the buoyancy in the market in terms of whether the crops are right, whether things are going in the right direction and that is what we see today and considering the emphasis given by the Finance Minister on rural growth and agriculture as a sector we are bullish about it but we don't expect the same rates of growth as were there in the past.

Any plans to increase your stake in Punjab Tractors - mutual fund and insurance companies hold quite a chunk?
Do we need to right now? The point is that after acquiring 43 per cent and after we make the open offer for another 20 per cent, we don't have to do anything right now on that front.