Diversified automaker maker M&M has unveiled plans to acquire a 38-per cent stake in BSE-listed EPC Industrie Limited.

The acquisition would be through preferential allotment of shares by EPC, following which M&M will make the mandaatory open offer to acquire a 20-per cent stake in the Nashik-based EPC.

For M&M, India's largest tractor maker, this is a related diversification in agriculture, where it already has a major presence in machinery and services through its farm equipment sector.

EPC Industrie Ltd was founded by IIT Mumbai aluminus K Khanna in 1981 in Nashik. Khanna is a pioneer in the industry and EPC is now one of the top five companies in India in micro-irrigation, selling drip irrigation systems, sprinkler irrigation systems and industrial pipes in over 12 states through a wide network of dealers. .

M&M said in a statement, "more than 80 per cent of the available water in India is consumed in agriculture. Micro irrigation is a water efficient irrigation technology. It reduces the amount of water and other inputs required for cultivation while improving productivity."

It said micro-irrigation, through all the benefits it brings to the farmer, such as reduced requirement of water, fertilisers, pesticides, de-weeding, electricity, labour, etc, ensures a 20 per cent to 30 per cent reduction in the cost of cultivation with an accompanying 10 per cent to 20 per cent increase in productivity.

Announcing the company's entry in the fast-growing micro-irrigation segment, Dr Pawan Goenka, president, automotive and farm equipment sectors, said, ''Micro-irrigation is a national imperative. With rising population and reducing water availability, micro-irrigation is an important method to reduce water consumption in agriculture to raise agricultural productivity in the country.''

The farm equipment sector has been operating in the agriculture domain through the Mumbai-based agri inputs company Mahindra Shubhlabh Services Ltd, which produces and distributes seed, seed potato and crop care products and initiatives like assisiting farmers in farm technology education and providing them allied support services through Mahindra Tractors'  Samriddhi centres.

M&M believes that the acquisition will help synergise its distribution strength with the industry expertise that EPC possesses.

''This is a win-win for both EPC and Mahindra. The business will now be able to grow and cater to the needs of millions of farmers in India.

Mahindra's presence will lead to the penetration of the technology in remote corners of rural India and thus help enhance the prosperity of many more farmers,'' said Ashok Sharma, EVP, Agri and Engine Application Business.

 ''A revitalised EPC will now have the opportunity to play a very important role in helping the farmer community to improve yields and manage the water resources more meaningfully,'' said Khanna.