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In a report published by the Financial Express, it has been reported that Mahindra and Mahindra had received the consent of its shareholders to merge its EV arm into itself.
Mahindra Electric Mobility Limited (MEML) is the electric vehicle subsidiary of M&M. The company offers a mobility solution called NEMO which is a cloud-based platform that enables a new generation of shared, connected & electric services that help revolutionize urban mobility.
It also produces EVs of a wide variety such as the sedan eVerito, the hatchback e2oPlus, the commercial van eSupro & the three-wheeler electric PVs Treo & eAlfa Mini. The company aims to create a sustainable automotive ecosystem that brings mobility solutions to customers across the world.
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The company had first announced its intentions for the merger in mid-June 2022 when it was seeking the NCLT's approval for the proposed merger. At the time, the company had explained that MEML, which had expertise in EV tech while M&M, which specialized in automotive design, engineering and manufacturing, sourcing network and sales, marketing & service channels, needed to be merged.
According to its explanation, the merger would bring the entire EV value chain under one umbrella which would drive a sharper focus for smooth and efficient management of the value chain requirements with the scale and agility required to meet the increasing focus on EVs.
According to the report, in the meeting dated 19th August 2022, the company received 99.96% votes in favor of the proposed merger. The merger will optimize capital investments, leverage the sales and marketing capabilities of M&M & rationalize the number of operating entities, reducing the number of legal and regulatory compliances.
M&M has big plans in the EV space as the company plans to start making deliveries by March 2023 and has an aim to sell 2 lakh EVs by FY27. Moreover, the merger has also paved the way for setting up a new wholly owned EV subsidiary for which the company had raised $250 million from the British International Investment (BII) at a valuation of $9.1 billion.
The stock had recently achieved a lifetime high of Rs 1,298.70 per share but contracted after that. The stock closed at Rs 1,226.70 per share today, down 1.02%.
Article by Aman Agarwal.
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