Mahindra & Mahindra gains 2% in a subdued market; here’s why

Shares of Mahindra and Mahindra (M&M) in trade on Wednesday gained up to 2% intraday to the day’s high of Rs 1261.75 following a stake sale in Mahindra CIE Automotive. Later, the scrip pared its early gains and was trading higher by 0.9% at Rs 1246.4 apiece on the NSE.

In a regulatory filing, the auto major informed exchanges about selling 82,42,444 equity shares, representing 2.173% of the paid-up share capital of Mahindra CIE Automotive, a listed associate of the company.

“The sale has been executed on the stock exchanges through the bulk deal window, at a gross price of Rs 285 per share. Following the sale, the shareholding of the company in MCIE has come down from 11.427% to 9.254% of its share capital," added the company filing.


Brokerage firm ICICI Direct is of the view that proceeds from this stake sale will partly be deployed to finance the company’s acquisition of a 17.4% stake in Swaraj Engines.

Further in another development, M&M acquired 21,14,349 equity shares constituting 17.41% of the paid-up equity share capital of Swaraj Engines from Kirloskar Industries. Consequently, the shareholding and voting rights of M&M in Swaraj Engines stand increased from 34.72% to 52.13% and Swaraj Engines now becomes M&M’s subsidiary with effect from 27 September, 2022.

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