By Santanu Choudhury/Bloomberg
New Delhi: Mahindra and Mahindra Ltd, India’s biggest sport-utility vehicles maker, plans to raise as much as Rs1,350 crore ($322 million) in its biggest fund-raising initiative to develop new products and expand capacity.
Mahindra may raise up to $300 million by selling shares or convertible bonds overseas, the Mumbai-based company said in a statement to the Bombay Stock Exchange on 20 April.
Mahindra, partnering Renault SA and Navistar International Inc. to make cars and trucks in India, needs funds to set up factories and develop new products as competition intensifies in Asia’s fourth-biggest automotive market. Automakers plan to invest $5 billion in India in the next six years as car sales may triple to 3 million on demand from middle class consumers.
The fund-raising plan, which was approved by Mahindra’s directors on 20 April, will be sent to shareholders for their clearance, the company said.
Mahindra raised $200 million last year selling bonds overseas that can be converted into local stock, following $115 million raised in 2004.
The funds will also be used to make investments in joint ventures and acquisitions, the company said.