- 14 Dec 2023
- ICICI Securities
COMPANY TO INVEST ₹ 525 CRORE IN ITS SUBSIDIARY CLASSIC LEGENDS PVT. LTD
M&M - 3006 Change: -13.20 (-0.44 %)News: M&M in a regulatory filing to stock exchanges has informed about ₹ 875 crore as equity fund raise by its subsidiary Classic Legends Pvt. Ltd (CLPL) in the form of compulsory convertible preference shares (CCPS) wherein its own contribution would be ₹ 525 crore and rest ₹ 350 being infused by existing as well as new investors. Post the equity raise M&M will continue to hold 60% stake in Classic Legends.
Views: Classic Legends is mainly engaged in design, development, sales & marketing of two wheelers, spares, accessories & related activities. CLPL has revived classic motorcycle brands and has launched motorcycles such as Jawa, Yezdi and BSA. It did sales of ₹ 710 crore as of FY23 and posted a loss of ₹ 150 crore. We are yet to see meaningful traction from CLPL in the premium motorcycle segment with company not sharing any volume details in this space. However, given the capital conscious DNA change at M&M we expect the brand to revive and post meaningful recovery going forward.
Impact: Neutral