Mahindra & Mahindra has recently sought approval from the National Company Law Tribunal to merge Mahindra Electric Mobility Ltd. with itself. The merging of Mahindra and Mahindra with the Mahindra EV arm will likely increase the value chain efficiency.
- Mahindra & Mahindra seeks approval for sharing the same roof with Mahindra Electric Mobility Ltd.
- The tribunal court directed the companies to seek permission from all the shareholders for approval of the incorporation.
- The merging will optimize capital investments for manufacturing Mahindra EVs that would decrease EV costs.
Indian automotive manufacturer, Mahindra & Mahindra, is seeking permission from the National Company Law Tribunal to merge with its Mahindra EV Arm, Mahindra Electric Mobility Ltd.- to form Mahindra and Mahindra Ltd. The company announces that the merging will benefit the customers as they can avail of better service at a cheaper price under a single roof.
The company reported that the development of its EVs and its manufacturing and sales are torn between M&M and MEML, thus it feels the need to function in a combined way, thereby boosting its value chain efficiency. According to M&M – “M&M also envisages significant investments in the EV business to scale up the business and develop a robust EV product pipeline for which the proposed consolidation will be critical. Further, M&M’s better credit rating will also provide significant savings in finance costs for funding the investment,”.
- Mahindra XUV 400 spied testing in India with updated features.
- 50% of vehicles sold by Mahindra will be electric by 2030.
The legal advisors of the company also reported- “MEML has expertise in Mahindra EV technology while M&M has expertise in automotive design, engineering, and manufacturing, sourcing network and sales, marketing & service channels”.
The company claims that the merging of Mahindra & Mahindra and Mahindra Electric Mobility Ltd. under a unified room will result in the shift of the entire value chain under one umbrella, which will enable the smooth functioning of the company for the effective management of the value chain. This unified roof will also result in the development of the company’s Mahindra EV sector to an unimaginable extent.
According to the reports, the data provided by the company to the tribunal court revealed that Mahindra Electric Mobility Ltd had around 846 unsecured creditors worth Rs 485 crore. In contrast, Mahindra & Mahindra Ltd has 43,596 unsecured creditors worth Rs 16,535 crore.
The tribunal court which was benched by Justice PN Deshmukh and Shyam Baba Gautam, on 10 June, directed both Mahindra & Mahindra and Mahindra Electric Mobility Ltd to hold a meeting to seek approval from all its shareholders. Further, the court-appointed the shareholder’s group chairman Anand Mahindra, as the chairperson of the meeting. In his absence, Anish Shah, managing director of Mahindra & Mahindra Ltd, or Rajesh Jejurikar, executive director of the Auto & Farm Sector division can chair the meeting.
Advocate Hemant Sethi, the company’s lawyer, informed the tribunal court that optimizing capital investments for manufacturing EVs by using M&M’s production and R&D facilities would decrease EV costs. He asserted- “Leveraging M&M Sales & Marketing channel to increase EV penetration, optimize price points for customers and improve dealer viability,”
Mahindra and Mahindra, which provide newness to the wheels in roads, will find their new course of development with this merging. This unified structure of M&M and Mahindra Electric Mobility Ltd will also prove a better deal for the Indian customers as it will provide better service at a reduced price.
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