The carmaker will acquire a 16% stake in parent company in Zoomcar Inc.
M&M, through its subsidiary, Mahindra Overseas Investment Company (Mauritius) Limited (MOICL) would invest Rs176cr in Zoomcar India or Zoomcar Inc. This amount, when converted to common stock of Zoomcar Inc. on a fully diluted basis, would constitute roughly 16% stake in parent Zoomcar Inc. Zoomcar India reported revenue of Rs121cr in FY17 and operated 2,500 vehicles in 27 cities and 3,000 bicycles in 10 cities.
In November 2017, M&M and Zoomcar announced a partnership to introduce electric vehicles in the shared mobility space. Zoomcar recently launched Mahindra e20Plus electric vehicles across Mysore,
Bangalore and Hyderabad. Going forward, it expects to add another 500+ Mahindra EVs across more than 20 cities pan-India, in the first half of CY2018.
The deal is expected to give M&M an entry into the shared mobility space and opens a new avenue for sale of its vehicles through the shared mobility platform. The move is part of a $40mn funding that Zoomcar Inc is raising for accelerating its marketplace supply growth, improving its lead within applied IoT technologies, and expanding into additional mobility categories across India.
The combined entity (standalone M&M and subsidiary MVML) derives revenue from farm equipment (35%), automotive including 2W (61%) and others (4%) as on Q3FY18. It is market leader in the tractor industry with share of 44% as on Q3FY18. On account of new launches and normal monsoon, management expects the tractor industry to grow at 15-18% in FY18 and 8% in FY19. In the automotive business, M&M expects UV segment to perform well backed by two new launches and three product refreshes.
Mahindra & Mahindra Ltd is currently trading at Rs746.75, down by Rs3.8 or 0.51% from its previous closing of Rs750.55 on the BSE.
The scrip opened at Rs750.55 and has touched a high and low of Rs752.5 and Rs744.05 respectively. So far 2,24,757(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs93,307.82cr.
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