M&M announced NewCo, a wholly-owned subsidiary for last-mile mobility, on March 22, which secured approximately Rs 600 crore in funding from the International Finance Corporation.
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On March 23, Nomura, a reputable brokerage firm, expressed their optimism towards the newly established electric vehicle (EV) businesses of Mahindra and Mahindra (M&M). They suggested that these ventures could bring about a significant increase in value.
According to the report, M&M’s core business currently trades at approximately one times the EV/Sales ratio for FY23F. However, Nomura estimates that the ‘NewCo’ subsidiary, established by M&M for last-mile mobility (LMM), could have a valuation of approximately 2.5 times the EV/Sales ratio for FY23F. As a result, the brokerage firm believes that fundraising for this new subsidiary will be value accretive.
This positive outlook is a testament to the potential of M&M’s new electric vehicle businesses and their ability to create significant value in the future.
The auto behemoth has unveiled the news of securing a handsome sum of approximately Rs 600 crore from the prestigious International Finance Corporation (IFC) to fuel its burgeoning business. Following this infusion, IFC will be the proud owner of a significant stake ranging from 9.97 per cent to 13.64 per cent in the illustrious subsidiary.
According to the brokerage firm, the financing from IFC will accelerate the growth of the business and pave the way for the introduction of cutting-edge products for the next generation.
