- 08 Jul 2022
- ICICIdirect Research
M&M ANNOUNCES FORMATION OF SUBSIDIARY IN EV-PV DOMAIN, INVESTMENT BY BRITISH INTERNATIONAL INVESTMENTS (US$ 250 MILLION)
News: M&M has announced the formation of a new subsidiary to undertake business activity in the domain of electric passenger vehicle segment. It also announced fresh investment by itself and British International Investments (BII) to the turn of | 1925 crore each (spread over two tranches), thereby valuing the new subsidiary up to ~| 70,070 crore (prevailing market capitalisation | 1.4 lakh crore)
Views: This is a positive development and will help in value creation for the exciting work in the electric passenger vehicle domain, which the company has indicated at doing, going ahead. BII will hold 2.75-4.76% stake in the new entity post its investment with M&M retaining the rest. We expect the stock to open gap up in opening trade today. Total investment envisaged for the subsidiary over FY24-27 is pegged at ~US$ 1 billion. The present deal is envisaged to be closed by June 2023
Impact: Positive