Mumbai, April 18 (IANS) The world's fourth largest tyre company, Germany based Continental Group, has signed an agreement to buy the tyre unit of Modi Rubber.

"The company has signed agreements with the Continental Group for the sale by Modi Rubber Ltd of 100 percent shareholding in its subsidiary - Modi Tyres Company Ltd and such sale, still depends on fulfillment of several conditions contained in the agreements," the Indian company said in a regulatory statement Monday.

The company, however, did not divulge the financial details of the deal.

After completion of the transaction, Modi Tyres Company Ltd will become a wholly owned subsidiary of the Continental Group, it added.

Post the announcement, shares of Modi Rubber soared 10 percent at the Bombay Stock Exchange, to touch the upper circuit limit of Rs.75.35.

Modi Tyres already has a technical cooperation agreement with Continental AG under which branded truck and bus tyres of the German major are produced in Modi Tyre's plant at Modipuram in Uttar Pradesh.

Sale of automobiles in India grew a robust 30 percent in the last fiscal to 1.98 million units, largely due to the growing purchasing power of the middle class, easy credit and a wider range of models to choose from. However, higher input costs and a rise in interest rates are expected to slow demand for cars in 2011-12.