Apollo Tyres on Monday decided to offer 14.9 per cent stake to Michelin for Rs 129 crore (Rs 1.29 billion) and to set up a joint venture, which would be 51 per cent owned by the French firm, while the former would have 49 per cent holding.

Apollo's board of directors have agreed to the Michelin's purchase of 14.9 per cent equity share capital through a preferential allotment for about Rs 129 crore, Apollo Tyres chairman S Kanwar told a news conference in New Delhi.

The joint venture, Michelin Apollo Tyres, would be set up to produce bus and truck radial tyres. It would take about 18-24 months to begin production, he said.

The 14.9 per cent skate roughly works out to 57 lakh (5.7 million) shares at around Rs 235 per share.

Apollo Tyres scrip was quoted at Rs 258 at the Bombay Stock Exchange this afternoon.

With the offloading of stake and an agreement to set up a joint venture with Michelin, Apollo's technical alliance with Germany-based tyre firm Continental would cease to exist, Kanwar said.

Asked whether Apollo and Michelin had identified the place to set up manufacturing base, he said, "Though it is yet to be decided, Karnataka, Maharashtra and Tamil Nadu can be one of the places."