Tag: M&M

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M&M to Fully Acquire Agri-Tech Firm MITRA – Top Indian Market Updates

Here are some of the major updates that could move the markets tomorrow:

M&M buys out VC firm Omnivore’s stake to acquire agri-tech firm MITRA

Mahindra & Mahindra (M&M) has acquired agro-equipment maker MITRA Agro Equipments after buying out venture capital firm Omnivore’s stake in the company. The move comes in line with M&M’s strategy to grow its revenues from the farm machinery segment 10-fold within the next five years. M&M Farm Equipment Sector has signed definitive documents to raise its shareholding in MITRA Agro Equipment from 47.33% to 100%, making it a wholly-owned subsidiary of M&M.

Read more here.

SC declines to stay NCLAT order to hold second round of auction for Reliance Cap assets

The Supreme Court has declined to stay the National Company Law Appellate Tribunal’s (NCLAT) order to hold a second round of auction for Reliance Captial’s assets. A bench comprising Justices Sanjiv Khanna M.M. Sundresh declined to entertain Torrent Group’s contention seeking a stay on the NCLAT order and issued notice on its plea and fixed the matter for further hearing in August. 

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Smart prepaid meters to reduce power bills by up to 2.5%

Union Power Minister R K Singh has urged electricity consumers to use smart prepaid meters as the device helps users bring down power costs by up to 2%. Installation of smart prepaid meters reduces the operational and finance cost for electricity suppliers as consumers credit their accounts in advance.

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JSPL gets approval to manufacture India’s first fire-resistant steel structures

Jindal Steel and Power Ltd (JSPL) will manufacture India’s first fire-resistant steel structures at its unit in Raigarh, Chhatisgarh. With the production of a special steel item for the first time in India, the company will target segments like refineries, bridges, metro projects, industrial structures, steel, power plants, hospitals, commercial and residential buildings. The grade is being imported at present.

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India’s domestic air passenger traffic grew to 1.20 crore in Feb 2023: DGCA

India’s domestic air passenger traffic grew 56.82% year-on-year (YoY) to 1.20 crore in February as per the data released by the Directorate General of Civil Aviation (DGCA). All domestic carriers together had flown a total of 76.96 lakh passengers on local routes in February 2022. IndiGo led the rally by flying 67.42 lakh passengers during the previous month, securing 55.9 % of the total domestic passenger traffic in February 2023.

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Sterling & Wilson Renewable Energy bags order worth Rs 2,100 crore from NTPC REL

Sterling & Wilson Renewable Energy Ltd (SWRE) has emerged as the successful bidder for the balance of system (BOS) package comprising 4 blocks of 300MW each in the proposed 1200 MW Solar PV Project of NTPC Renewable Energy Ltd at Khavda RE Power Park in Rann of Kutch, Gujarat. The aggregate capacity is 1500 MW (DC). The total bid value, including operation and maintenance (O&M) for three years, would be Rs 2,100 crore.

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Godawari Power & Ispat approves Rs 250 crore share buyback via tender offer route

Godawari Power & Ispat has approved a buyback of equity shares worth Rs 250 crore at its board meeting held on Saturday. The company will buy back up to 50 lakh equity shares, which represents 3.66% of the total number of paid-up equity share capital of a face value of Rs 5 each. The buyback price has been set at Rs 500 per share, which is a 28.2% premium to Friday’s closing price. The buyback will be done through the tender offer route. The record date for the same has been set as March 31, 2023.

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PSU banks’ gross NPA declines from 14.6% in Mar 2018 to 5.53% in Dec 2022

The gross non-performing assets (NPA) ratio of public sector undertaking (PSU) banks has declined from the peak of 14.6% in March 2018 to 5.53% in December 2022 following various reforms by the government. All PSU banks are in profit, with aggregate profit being Rs 66,543 crore in 2021-22. This has further increased to Rs 70,167 crore in the first nine months of the current financial year (FY24), according to the  Minister of State for Finance Bhagwat K Karad.

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Cochin Shipyard wins Rs 550 crore overseas order

Cochin Shipyard Ltd has received an international order of Rs 550 crore from Norway-based global logistics solution provider Samskip Group. The order is for the design and construction of two Zero Emission Feeder Container Vessels. The total project cost for the order is approximately Rs 550 crore and the first vessel is to be delivered in 28 months and the second within 34 months. 

Read more here.

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Editorial

The Future Plans of Mahindra & Mahindra

One of India’s most trusted vehicle manufacturers is scheming plans to introduce some massive changes. The CFO of Mahindra & Mahindra Ltd. has announced that they are planning big initial public offerings (IPOs) for 10 of its businesses. He has also stated that the company is taking concrete steps to focus on those units that would contribute towards their long-term growth. Let us take a look at which of its units are going to be listed, and other future plans of the company.

Focus on Growth and IPOs

  • Mahindra & Mahindra plans to list 10 of its businesses. These businesses are spread across six sectors.
  • The sectors include Financial Service, Infrastructure, Clean Energy, Rural, Clean Mobility (Electric Vehicles), and Technology. Mahindra has identified 10 ‘gem’ companies under each of these sectors.
  • Given below are some of the companies that will be listed on the stock exchanges:
M&M ‘Gem’ CompaniesType of Company
Mahindra AcceloElectric Steel Processor
Bristlecone Supply-Chain Consultant
Mahindra PowerolDiesel Generator Maker
Classic Legends Private LimitedOwner of Jawa Motorcycles
Mahindra Susten Clean Tech Firm
Mahindra Electric MobilityOwner of Reva Electric Car
Mahindra First Choice WheelsUsed Car Sellers
  • The individual contribution of these units to M&M’s overall revenue is low. However, the current cumulative revenue of each of these ‘gems’ is more than Rs 10,000 crore.
  • Anish Shah, the CFO of M&M Group, has announced that the company expects 2-3 of its businesses to go public in the next 3 years. The other subsidiary companies will be listed in 5-7 years.

“They (the gem companies) are positioned well; they have shown a strong mobility to execute and deliver profits, and many of them are profitable and generating cash. Many of them will not require more cash from the parent company to grow” – M&M CFO and Deputy Managing Director Anish Shah.

  • This is part of Mahindra’s strategic plan to ensure an 18% return on equity (RoE) across all business units in the mid-term.
  • M&M is also planning to sell its loss-making units to achieve its strategic target. Its units such as South Korea-based SsangYong Motor Company and Australia-based aircraft maker GippsAero Pty Ltd. are to be sold. They are also planning to sell GenZe, a US-based electric bike startup. The group has also announced that additional capital or other financial support will not be provided for SsangYong.

The following graph shows the finances of the sectors in which the firms operate:

Source: Mint

Forward-thinking Plans

M&M, the Indian multinational vehicle manufacturer, has carefully selected those companies that have the potential to grow into much larger entities. They are looking for investors in their used car business (First Choice) to capitalize on the present demand for pre-owned cars. The steel-processor, Mahindra Accelo, would receive a major boost at a time when the Indian government is planning to introduce the vehicle scrappage policy. The company has stated that they would be ready with 25 plants across the country as and when the policy comes out. They are also focusing on shifting towards renewable or clean energy sources. With the introduction of their new tractor series K2, they are also ensuring that the current demand of India’s agricultural communities is met.

This is a prime example of how a company’s management looks way into the future and initiates plans to obtain a major hold in each sector. It seems like there is no stopping Mahindra & Mahindra from securing its vision for the company. Will they be able to initiate these plans successfully? Let us look forward to seeing how these plans are going to be implemented in the coming years. We will be able to trade in these ‘gems’ very soon. 

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Market News Top 10 News

L&T Secures Massive Order from Tata Steel – Top Indian Market News

L&T secures order from Tata Steel for supply of mining equipment

Larsen & Toubro (L&T) announced that it has secured an order from Tata Steel to supply 46 units of Komatsu Mining Equipment. The agreement includes the supply of equipment and a full maintenance contract for 60,000 hours of equipment operation. The units will be deployed at Tata Steel’s iron ore mine in Odisha, and its coal mine in Jharkhand.

Read more here.

Union Steel Minister calls for reducing imports of finished steel goods

Union Steel Minister Dharmendra Pradhan, on Wednesday, called for reducing imports of finished steel goods. He has urged the steel industry to leverage the technology and resources available in India. The Steel Ministry has also suggested that industry players could form joint ventures to set up special grade steel plants in the country.

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Pfizer vaccine 95% effective in final trials with no safety concerns

Pfizer Inc. announced that the final results of the clinical trials show its Covid-19 vaccine was 95% effective. The company stated that the vaccine is showing signs of being safe for people of all ages. The vaccine candidate is being developed through a partnership between Pfizer and Germany-based BioNTech. The companies are all set to seek emergency authorization for use of the vaccine from the US Food & Drug Administration (USFDA).

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India’s domestic air traffic down 57% YoY in October: DGCA

Domestic air traffic in India declined by 57% year-on-year (YoY) in October, as the number of Covid-19 cases has continued to rise. According to data released by the Directorate General of Civil Aviation (DGCA), Indian airlines carried 52 lakh passengers in October. The Civil Aviation Minister, Hardeep Singh Puri, had stated that the domestic aviation sector will reach pre-Covid levels by the beginning of January 2021.

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Vedanta submits expression of interest to buy stake in BPCL

Vedanta Ltd., on Wednesday, submitted a preliminary expression of interest (EoI) for buying the government’s stake in Bharat Petroleum Corporation Ltd (BPCL). The company’s interest in India’s second-largest fuel retailer is because of synergies with its existing oil and gas business. The government is selling its entire 52.98% stake in BPCL, and the last date to submit the EoI was November 16.

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IRB Infra InvIT completes second round of fund raising by securing Rs 510 crore

IRB Infra InvIT said that it has completed the second installment of its fund raising programme by securing Rs 510 crore. The GIC Affiliates, which hold a 49% stake in the InvIT, have contributed Rs 250 crore. IRB Infrastructure Developers Ltd, being the 51% stakeholder, contributed Rs 260 crore. IRB Infra InvIT is India’s first infrastructure investment trust.

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Cipla signs licensing deal with Belgium-based MultiG

Cipla Limited announced that it has signed a licensing agreement with a Belgian-based firm, MultiG. As per the deal, Cipla will distribute its Covid-19 rapid antibody testing (RAT) kit across most emerging markets and Europe. The Mumbai-based drug firm will be selling the RAT kits under the brand name Covi-G. The testing kit will provide results within 10 minutes.

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M&M to make new K2 series tractors in Telangana

Mahindra & Mahindra Ltd. said that it will manufacture the new K2 tractor series exclusively at its Zaheerabad plant in Telangana. The company has stated that it will increase its investments at the facility by Rs 100 crore, and double employment by 2024. Mahindra will introduce 37 models of the new K2 series for both domestic and international markets.

Read more here.

Vedanta Zinc suspends operations at South Africa mine after accident

Vedanta Zinc International (VZI), a unit of Vedanta Ltd, has suspended all mining-related activities at its Gamsberg zinc mine in South Africa. The company has stated that a geotechnical failure had trapped ten employees at the mine on Tuesday night. As of 5 am IST today, VZI said that eight of the workers were rescued, and efforts to locate and rescue the remaining two were its “main priority”.

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TTK Prestige declares lockout at Khardi unit in Maharashtra

TTK Prestige Limited said that a lockout has been declared in its Khardi unit in Maharashtra. The workers had conducted an illegal sit-down strike at the company’s unit. The firm has also stated that it has adequate alternate capacities in other factories, and the lockout would not cause a major financial impact.

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Sadbhav Engineering receives Letter of Acceptance from NHAI for EPC road projects

Sadbhav Engineering Ltd. announced that it has received a Letter of Acceptance (LoA) from the National Highway Authority of India (NHAI). The LoA has been provided for two Engineering, Procurement, and Construction (EPC) road projects in Gujarat. The contract value of the project has been estimated at Rs 1,572.30 crore.

Read more here.

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Market News

Mahindra & Mahindra Q1 results: 97% fall in net profits; below street estimates

M&M

The vehicle maker Mahindra & Mahindra declared their Q1 FY21 results on Friday. The company reported a 97% fall in net profits year-on-year (YoY). Last June, net profits were accumulated to be Rs 2260 crore against Rs 68 crore reported this quarter. This performance is below what the market estimated.

Q1 FY21Q4 FY20Q1 FY20QoQYoY
Revenue16,32120,49926,289-20.3%-40%
Profit68-1,822.62260103%-97%
Values in Crore Rupees

About the Company

Mumbai headquartered, Mahindra & Mahindra (M&M) is an Indian multinational automobile manufacturing corporation. It was established in the year 1945 and is a part of Mahindra Group. Being a market leader, it dominates the tractor manufacturing market. Its major competitors in the Indian market include Tata Motors and Maruti Suzuki. Currently, the company has a market capitalization of Rs 74,666 crore.

Quarter Review and future

The coronavirus pandemic and the national lockdown has had a severe effect on the automobile sector. The shop was forced to close which reduced the sales number drastically. The company sold 27,565 units of vehicles, 78% lower than the previous year. Also, only 64,140 units of tractors were sold, 22% lower than what was reported in June 2019.

“After the first-ever zero sales in the month of April, the industry is finding its way back. The company’s key brands which have a strong rural bias saw good demand in the month of June. The timely relaxation of the lockdown for the agricultural sector along with positive rural sentiment led to good sales numbers for tractors during the quarter despite the supply chain issues, showing a positive growth rate in May and June 2020.” the firm said in a release.

The next set of challenges for the company comes in this COVID era. Sales of tractors are still better because of the positive rural sentiment due to a good harvest expectation. After the unlock procedure, the demand for rural units has increased. It has to deal with the challenge to ramp up the production without compromising on social distancing measures. The automobile sector is in a revival mode since the lockdown has been lifted. You can read more about this here.