Mahindra Buys Stakes in Kinetic

Friday 01 August 2008, 00:00 AM by Rishi

Mahindra and Mahindra has signed a joint venture with Pune based promoted of Kinetic group. The new company would be Mahindra Kinetic where M&M shall hold 80 percent stakes while Kinetic Motor shall own balance 20 percent. Markets reacted positively to the deal as the stocks moved nearly 4.8 percent at BSE.

The joint venture shall enable Mahindra and Mahindra to make a foray in the two-wheeler market in India which would strengthen their presence in the Indian auto market. Mahindra is bullish about the two-wheeler industry in India and expects a turnaround in two-wheeler growth in the country.

Mahindra and Mahindra is expanding their market presence in the Indian auto sector as they have acquired tractors from Actis and signed a deal with Renault Nissan in passenger car segment. After the Kinetic joint venture, they would only be missing from the large commercial vehicle market segment in India.

Firodias, promoters of Kinetic Honda, shall own 54.8 percent in Kinetic Motor directly and indirectly through their listed auto component firm, Kinetic Engineering. It shall indirectly hold an 11 percent stake in the new JV. Currently, Kinetic marks its presence in the auto component business in India.

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