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Mahindra to make 10 group companies public, sell loss-making units

Mahindra and Mahindra Ltd (M&M) is one of the oldest companies in India. Formed in 1945, the company is one of the largest manufacturers of the automobile in India and The largest producer of Tractors in the whole worldwide.

Mahindra is currently coming up with a plan to take 10 of its most assuring units to go public in the coming 5-7 years. As the automobiles-to-software firm aims to obtain more value in their star companies by bringing in brand new investors.

According to Mr Anish Shah the group Chief Financial Officer and deputy managing director at M&M, the company recognised the 10 companies, over sectors such as mobility, clean energy, agricultural, economical services, infrastructure and technology, to encourage the future extension of the group. Shah will most likely succeed to become the current managing director and Chief Executive Officer Pawan Goenka in April.

Some of the well-known companies of the 10 units going public are Mahindra Susten, Mahindra Powerol, Mahindra Accelo, Bristlecone, Jawa Motorcycle, Mahindra Electric Mobility and Mahindra First Choice Wheels.

Susten is a cleantech firm, Powerol is a diesel generator maker, Accelo is an electrical steel processor, Bristlecone is a supply chain consultant, Jawa is a premier motorcycle brand, Mobility is the electric vehicle manufacturer and last but not the least First Choice Wheels deals with used cars buying and selling.

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Mr Shah also stated that these 10 companies were recognised as a part of M&M's strategic plan to ensure 18% return to equity across multiple business units in the following mid-term. To achieve such a target, the company has come up with a solution to sell the loss-making units. Certain names are indicated such as SsangYong Motor Co., Australia-based small aircraft producer GippsAero Pty Ltd and the US-based electronic bike startup GenZe.

“While their (10 gems) contribution to M&M’s overall revenues is low, currently, their cumulative revenues are more than 10,000 crore, which is not a small amount. So, these are all entities that have a reasonable size as of today. This is in addition to the fact that they are doing well in their respective industries," Shah said. “They are positioned well; they have shown a strong ability to execute and deliver profits, and many of them are profitable and are generating cash. Many of them will not require more cash from the parent to grow."

Shah said that the company is searching for investors in its used-car business to benefit on the market forces for pre-owned cars.

Similarly, M&M sees commitment in steel processor Mahindra Accelo as the central government is expected to include the much-awaited vehicle scrappage policy soon.

Mahindra has been the market for more than 75 years and is well versed with the highs and lows of the market and industry hence they are not in many worries even during COVID and are looking forward to expanding the company even further.