Mahindra sells its entire stake in First Choice Services to TVS Automobile

It has also sold its entire stake of optionally convertible redeemable preference shares in Auto Digitech, a wholly-owned arm of Mahindra Holdings for Rs 13.5 crore to TVS

Mahindra Holdings, a wholly-owned subsidiary of Mahindra and Mahindra has concluded the sale of its 100 per cent stake in Mahindra First Choice Services (MFCS) to TVS Automobile Solutions, the company said in a stock exchange notification. 

It has sold the residual stake in the services arm of the used car business for a consideration of Rs 21.5 crore. It has also sold its entire stake aggregating 100 per cent of optionally convertible redeemable preference shares in Auto Digitech, a wholly-owned subsidiary of Mahindra Holdings for a cash consideration of Rs 13.5 crore to TVS.

As a result, MFCS and Auto Digitech have ceased to be subsidiaries of Mahindra Holding and of the company with effect from 25 February 2021, it said.

Mahindra had announced ceasing a controlling stake in Mahindra First Choice Services on November 26 to TVS Automobile, the announcement on Wednesday marks a complete a exit of the former from the services business. The Mumbai headquartered firm has been exiting loss making businesses as part of the larger capital allocation exercise it initiated since the beginning of this fiscal.

The turnover of MFCS for the year ended 31st March, 2020 was Rs 106.52 crores and after elimination of inter-company transactions with the Group, it contributed Rs 106.30 crores or 0.11 per cent to the consolidated turnover of the company. The net worth of MFCS for the year ended 31st March 2020 was negative at Rs53.36 crores and after elimination of inter-company balances with the Mahindra Group, it contributed negative Rs 53.36 crores or negative 0.13 per cent of the consolidated net worth of the company excluding non-controlling Interest, Mahindra said in the filing.