With this, the stake of Premier Automobiles in IAL has come down from 49 per cent to 24 per cent. The board of the company has also been reconstituted with Vinod Doshi continuing as non-operative chairman, P Sighicelli as vice chairman (non-operative), G B Ravina as managing director, Maitreya Doshi as whole time director and R Carli as member of the board.

Ind Auto was conceived as a joint venture between Fiat India and Premier Automobiles Ltd (PAL) of the Doshis. However, due to the sagging health of PAL, fresh investments are being made by the Italian company which has led to a hikein stake by the Turin-based multinational.

Fiat already has the Foreign Investment Promotion Board (FIPB) approval to convert the joint venture into a wholly-owned subsidiary. The Rs 65 crore equity structure of the 51-49 joint venture has thereby been raised to Rs 133 crore and the shareholding to 76-24.

The decision to hike its holding in the venture stems out of Fiat's plans to consolidate its car-making activities in India. Fiat has also decided that all its project 178 operations, for the Siena and Palio range, will now be carried out by FIL, the statement said.