Mahindra and Mahindra Ltd (M&M) is designing plans to take 10 of its most promising units public in the next 5-7 years as the automobiles-to-software conglomerate has set its goal to unlock maximum value in these units by involving new investors. M&M has identified the 10 companies, across sectors such as mobility, clean energy, rural, financial services, infrastructure and technology, to chart the course of the future growth of the group, Anish Shah, group chief financial officer and deputy managing director at M&M, said in an interview.
The 10 units identified by Mahindra and Mahindra include cleantech firm Mahindra Susten, diesel generator maker Mahindra Powerol, electrical steel processor Mahindra Accelo and supply-chain consultant Bristlecone. Classic Legends Pvt. Ltd, the maker of Jawa Motorcycles; Mahindra Electric Mobility, the maker of the Reva electric car and used-car seller First Choice Wheels are also among the 10 companies that will make its shares available to the public for the first time.
These 10 gems were identified as part of M&M’s strategic plan to ensure 18% return on equity (RoE) across all business units in the mid-term, he said. To meet this goal, the company is to sell loss-making units including SsangYong Motor Co, the US-based electric bike startup GenZe and Australia-based small aircraft maker GippsAero Pty Ltd.
“We would expect 2-3 businesses to IPO in the next 2-3 years; some will go public in 3-5 years and others in 5-7 years,” Shah said. “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,” he further added.
Shah will succeed the current managing director and chief executive officer Pawan Goenka in April.
