Shares of most tyre manufacturers were under pressure in the morning trade on February 3 after the Competition Commission of India (CCI) slapped a Rs 1,788-crore fine on these companies for cartelisation.
The fair-trade body found that five companies and the Automotive Tyre Manufacturers Association had jointly increased prices of cross-ply variant of tyres sold by each of them in the replacement market and by controlling their production.
CCI has imposed a penalty of Rs 425.5 crore on Apollo Tyres, Rs 622 crore on MRF, Rs 252 crore on CEAT, Rs 309.95 crore on JK Tyre and Rs 178.8 crore on Birla Tyres.
"The tyre manufactures had exchanged price-sensitive data amongst them through the platform of their association, namely, Automotive Tyre Manufacturers Association (ATMA), and had taken collective decisions on the prices of tyres," the fair trade regulator noted.
Investors reacted negatively to the imposition of the fine with shares of Apollo Tyres, JK Tyre, CEAT, and Birla Tyres trading 1-3 percent down on the National Stock Exchange.
This is not the first time that tyre companies have been pulled up for price-fixing. In 2016, too, CCI had imposed penalties on tyre manufacturers for cartelisation.
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