M&M enhances stake in MITRA to complement its farm equipment business

With the acquisition of MITRA, M&M intends to catalyze the farm equipment sector’s growth in the horticulture equipment sector.

Mahindra & Mahindra Ltd, one of the leading auto companies in India with a leadership position in utility vehicles, has signed a Share Purchase Agreement (SPA) with M.I.T.R.A. Agro Equipments Private Limited (MITRA) an associate of the company.

As per this agreement, M&M shall acquire not more than 21,875 Equity Shares of Rs 10 each at a premium of Rs. 3,192.23 per Equity Share from the existing shareholders of the acquiree company.

About MITRA

MITRA is a domestic company engaged in manufacturing, assembling, designing, developing, and selling agricultural sprayers, rotavators & spare parts and after-sales services therefor. Established in 2012, the company operates in the fast-growing horticulture sprayers segment and is among the leading players in the organized segment.

The company has its presence in the states of Maharashtra, Gujarat, Karnataka and Andhra Pradesh. Its turnover in FY21 stood at Rs 32.9 crore.

Why this acquisition?

MITRA is amongst the leading players in the horticulture sprayers segment. With the acquisition of MITRA, M&M intends to catalyze the farm equipment sector’s growth in the horticulture equipment sector.

Status of the acquisition process

At present, M&M holds a 39.02% stake (on a fully diluted basis) in the acquiree company. Upon completion of the acquisition, this stake would increase to 47.33% (on a fully diluted basis). The cost of acquisition shall not be more than Rs 7.005 crore, which M&M would pay in cash.

Post the acquisition of additional equity shares, MITRA would continue to remain an associate of M&M.

At the time of market close, the share price of Mahindra & Mahindra Ltd was trading at Rs 861.75, a marginal decline of 0.26% from the previous day’s closing price of Rs 864 on BSE.