Mumbai: India’s leading utility vehicle maker, Mahindra & Mahindra, is set to announce on Wednesday it is buying a stake in an electric car company, a source with direct knowledge of the matter said on Wednesday.
Mahindra, also India’s largest tractor maker, will make an announcement at 11:45 a.m. in Bangalore, where the Reva Electric Car Company is headquartered, he said.
Details of the transaction were not immediately available.
Mahindra shares, valued at $6.4 billion, were up 2.6% at Rs529.70 by 9.40 a.m. after falling 4.4% in the last two trading sessions. The main index was up 1.3%.
The shares have fallen about 2% this year, while the main index is down nearly 7%.
A deal will mark Mahindra’s entry into the electric vehicles segment and push it a step closer to being a complete automotive vehicles manufacturer.
“Mahindra wants to consolidate its position as a company which wants to manufacture everything on wheels,” said Arun Kejriwal, director of KRIS Research. “This acquisition would go a long way in helping achieve this.”
Last year, Mahindra had launched a range of scooters and later made a foray into commercial vehicles with one-tonne Maxximo.
It is also scheduled to launch pick-up trucks in the United States towards the end of this year.
“Mahindra can leverage on Reva’s technology to bring out more products,” Kejriwal said.
Reva, founded by technocrat Chetan Maini in 1994, is an Indo-US joint venture with California’s AEV LLC and has launched more than 3,000 cars. Maini is its deputy chairman and chief technology officer.
The cars are priced between Rs300,000 and Rs360,000 ($6,329-$7,595) in India, and mostly run in Bangalore and London.
It struck a deal last year with the Indian unit of General Motors to develop electric cars and work has started on an electric version of the Chverolet Spark, which is scheduled to hit the roads in October.
In this year’s budget the Indian government gave a fillip to the electric vehicle industry by removing customs duties on import of critical components used in such vehicles.
The Times of India reported on Wednesday that Mahindra was close to a deal and valued Reva at about $100 million.