M&M gains after incorporating subsidiary company in Brazil

Mahindra & Mahindra rose 0.22% to Rs 1,412.85 at 10:30 IST on BSE after the company announced that it has incorporated a subsidiary company in Brazil.

The announcement was made before market hours today, 21 September 2016.

Meanwhile, the BSE Sensex was up 82.51 points, or 0.29%, to 28,605.71.

On BSE, so far 5,757 shares were traded in the counter, compared with average daily volume of 75,233 shares in the past one quarter. The stock hit a high of Rs 1,415 and a low of Rs 1,403.30 so far during the day. The stock hit a record high of Rs 1,508.80 on 9 August 2016. The stock hit a 52-week low of Rs 1,092 on 12 February 2016. The stock had underperformed the market over the past one month till 20 September 2016, sliding 3.03% compared with 1.59% rise in the Sensex. The scrip had also underperformed the market in past one quarter, rising 4.36% as against Sensex's 6.16% rise.

The large-cap company has equity capital of Rs 310.55 crore. Face value per share is Rs 5.

Mahindra & Mahindra (M&M) said that it has incorporated a subsidiary company in Brazil namely CMN Solutions Q013 Participacoes Ltda. M&M along with its wholly owned subsidiary Mahindra Overseas Investment Company (Mauritius) (MOICML) have executed a quota agreement and transfer engagement for acquiring 100 shares aggregating 100% of the capital stock of CMN Solutions which will enable this new company to acquire assets of a tractor distributor in Brazil namely Bramont Montadora Industrial e Commercial de Veiculos S.A. (Bramont). The acquired company is a shell company engaged in tractor distribution and has no operations till date. The cost of acquisition would not exceed $8.02 million out of which M&M would pay a consideration not exceeding $8 million for its stake in the target. The consideration for acquisition in cash would be paid upon receipt of approval from the Reserve Bank of India (RBI). The indicative time period for completion of the acquisition is October 2016.

M&M's net profit rose 12.4% to Rs 955.21 crore on 12.3% growth in net sales to Rs 10898.08 crore in Q1 June 2016 over Q1 June 2015.

M&M enjoys a leadership position in tractors and utility vehicles in India.

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