HDFC sells Mahindra First Choice stake to Cox Automotive

US-based digital marketing company Cox Automotive has acquired a significant strategic stake in Mahindra First Choice Wheels, the used-car retailing unit of Mahindra & Mahindra.

The transaction, through a secondary sale, saw one of Mahindra First Choice's early investors, HDFC, selling its entire stake. Phi Advisors, an initial private equity investor in the company, sold a part of its stake.

Mahindra First Choice Wheels did not disclose the size of the stake and neither the price at which it was sold. Cox Automotive with $17 billion annual revenue owns AutoTrader, the largest digital automotive marketplace in the US, and vehicle research platform Kelley Blue Book.

Mahindra First Choice had raised Rs 94 crore from San Francisco-based hedge fund Valiant Capital in March. The deal gave Valiant a 13.36% stake, valuing the company at about Rs 700 crore at the time.

Mahindra First Choice reported a profit of Rs 1.92 crore on revenue of Rs 44 crore during last financial year. According to Chief Executive Nagendra Palle, revenue is expected to hit Rs 70 crore this year.