M&M may list two-wheeler arm

Mahindra and Mahindra (M&M) plans to list its newlyformed two-wheeler venture on the stock market to raise money for expansion and unlocking shareholders value, when the venture attains profitability.
The company is also open to fresh investments for a new twowheeler factory, for expanding beyond Kinetic’s current 500,000 annual capacity that it has acquired, according Anoop Mathur, president, Mahindra Kinetic Motorcycles & Scooters.
M&M entered the 2-wheeler segment after buying the business assets of ailing Kinetic Motors late last month. The company paid Rs 110 crore for an 80% stake in the new unlisted venture while Kinetic retained the rest.
Mathur said listing the shares would enable the company mop up money from the market. “The funds would be used for our growth plans and also for unlocking shareholders value,” he said, though refusing to divulge any specific timeframe or other details like the amount the company could raise. “We will certainly do that when the company is profitable.”
Asked whether listing would also provide an opportunity for Kinetic to cash out and exit the venture, he said it could be an option.
The diversified Mahindra group has been listing some of its unlisted firms on the stock exchanges.
While it listed Mahindra Finance and Tech Mahindra in 2006, another group company Mahindra Holidays and Resorts is going slow for listing due to the prevailing uncertain market conditions.
On the expansion plans, Mathur said the company would start with the existing capacity that Kinetic gives it. Kinetic Motor has a plant at Pithampur in Madhya Pradesh. “We have a 500,000 annual capacity available to us. But we have to take a decision on the new volumes we plan to add and a second factory at another location is certainly an option we will look at,” he said. He said the company may go in for a new location while expanding to derive advantages.
“We could be looking at logistical advantages through a new location or it could also be to help us service some markets better. However, the location for new expansion is something we need to take a call as we evaluate our project next year,” he said.
M&M has plans to launch products across the entire motorcycle spectrum, including the competitive entry-level segment to take on Bajaj and Hero Honda. Also, the company would focus on the scooter market and said this would be the ‘entry point’ for its two-wheeler foray.