Mahindra & Mahindra (M&M) rose 0.88% to Rs 532.70 after the Competition Commission of India (CCI) approved the proposed joint venture (JV) between M&M and Ford Motor.
CCI on Monday (10 February) approved M&M's acquisition of majority stake in a subsidiary of Ford Motor Company, which will form a JV in the country.
In October last year, M&M and US-based Ford Motor Company signed a definitive agreement to create a JV that will develop, market and distribute Ford brand vehicles in India and Ford brand and Mahindra brand vehicles in high-growth emerging markets around the world.
In the JV, M&M will hold 51% controlling stake while Ford will have the remaining stake of 49%. Ford will transfer its India operations to the JV, including its personnel and assembly plants in Chennai and Sanand. Ford will retain the Ford engine plant operations in Sanand as well as the global business services unit, Ford Credit and Ford Smart Mobility.
The joint venture will be operationally managed by M&M, and its governance will be equally composed of representatives of M&M and Ford. The joint venture will be responsible for growing the Ford brand in India and exporting its products to Ford entities globally. Ford will continue to own the Ford brand, and its branded vehicles will be distributed through the current Ford India dealer network. M&M will continue to own the M&M brand and operate its own independent dealer network in India.
On the technical front, the M&M stock's RSI (relative strength index) stood at 24.628. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.
M&M's profit after tax (excluding one-off items and EI) rose 7% to Rs 934 crore on a 6% decline in revenue to Rs 12,120 crore in Q3 December 2019 (Q3 FY20) over Q3 December 2018 (Q3 FY19). The results include the combined earnings of M&M and Mahindra Vehicle Manufacturers (MVML), which is a manufacturing unit of M&M. The Q3 earnings were disclosed on 8 February 2020.
M&M's segments include automotive, farm equipment, financial services, real estate, hospitality and others. Automotive segment comprises of sale of automobiles, spares, mobility solutions and construction equipment. Its farm equipment segment comprises of sale of tractors, implements and spares.
Powered by Capital Market - Live News
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)