M&M gains 2% after clarifying reports on imposition of penalty untrue

Mahindra & Mahindra (M&M) shares rose 2.3 per cent on BSE in Friday's trade and logged an intraday high of Rs 2,968.3 per share. The stock climbed after the company clarified that reports about the Rs 7,300 crore penalty on M&M were untrue. 

 

Around 1:19 PM, M&M's share price was up 2.23 per cent at Rs 2,965.25 per share on BSE. In comparison, the BSE Sensex was up 0.89 per cent at 79,747.54. The market capitalisation of the company stood at Rs 3,68,737.39 crore. The 52-week high of the stock stood at Rs 3,221.1 per share and the 52-week low was at Rs 1,575.25 per share. 

 

"Any reference in the news article about the penalty imposed on the company is factually incorrect. To the best of our knowledge, no such Penalty has been levied or is being considered," the filing read. 

 

The company cited the article under the header “Hyundai, Mahindra, 6 others likely to face emission penalties of Rs 7,300 crore."

 

As per the filing, in December 2022, the Energy Conservation Act 2001 (EC Act) was amended to include penalties for vehicle manufacturers in case of non-compliance with Corporate Average Fuel Efficiency Norms II (CAFE Norms). It was clearly stated that this amendment is effective from January 1, 2023 only. 

 

Applying the amended penalty under the EC Act for the full period of FY2023 would mean the penalty is being applied retrospectively, which is incorrect. Hence, the company doesn’t expect any material liability for FY2023.

 

M&M is an Indian multinational conglomerate, part of the Mahindra Group, with a diversified presence in various sectors, including automotive, agriculture, aerospace, and IT. Founded in 1945, M&M is best known for its stronghold in the automotive industry, particularly for its rugged SUVs, tractors, and commercial vehicles. 

 

The company is a leader in the Indian tractor market and has a growing presence in the global automotive sector, with operations in several countries. M&M is also expanding its footprint in electric vehicles (EVs) with the launch of models like the Mahindra e2o and eVerito. Additionally, the company is involved in agribusiness, offering solutions for farming, and has ventures in financial services, hospitality, and real estate. 

 

Through its innovation and focus on sustainability, Mahindra & Mahindra has solidified its reputation as a key player in India's industrial landscape.

 

In the past one year, M&M shares have gained 79.1 per cent against Sensex's rise of 18 per cent.