MRF, Apollo Tyres, JK Tyre, CEAT stocks under pressure after CCI imposes a penalty for indulging in cartelisation

3 Feb 2022 , 02:55 PM

Stocks of MRF, Apollo Tyres, CEAT and JK Tyre was trading between flat to lower note on Thursday after the CCI imposed penalty on these companies alleged for indulging in cartelisation by acting in concert to increase the prices of cross-ply/bias tyres variants sold by each of them in the replacement market and to limit and control production and supply in the said market.

CCI has imposed a penalty on five major tyre manufacturers. Apart from the above four, the last company is Birla Tyres.

CCI passed a final order dated 31.08.2018 against five Tyre companies namely Apollo Tyres Ltd., MRF Ltd., CEAT Ltd., JK Tyre and Industries Ltd., Birla Tyres Ltd. and their association i.e. Automotive Tyre Manufacturers Association (ATMA)  for indulging in cartelisation

CCI has imposed penalties of Rs. 425.53 crore on Apollo Tyres, Rs. 622.09 crore on MRF Ltd., Rs. 252.16 crore on CEAT Ltd., Rs. 309.95 crore on JK Tyre and Rs. 178.33 crore on Birla Tyres, besides passing a cease and desist order. In addition, a penalty of Rs. 0.084 crore was also imposed on ATMA.

At around 2.51 pm, CEAT was trading at Rs1095.45  per piece flat compared to the previous closing. JK Tyre slipped by over 2%. Apollo Tyres traded flat att Rs225.65 per piece. MRF shed by Rs352.55 or 0.49% and was trading at Rs71169 per piece.

On the above CCI order, CEAT said, “The order is being studied for appropriate legal recourse,” adding, “We strongly reiterate that there has been no wrongdoing on the part of CEAT and want to reassure all the stakeholders that CEAT has never indulged in or as part of any cartel or undertook any anti-competitive practices.”