From a steel trading enterprise in 1945, the Mahindra and Mahindra Group has metamorphosed into a multi-billion rupee conglomerate in a few decades
Mumbai: In the year that India awoke to redeem its tryst with destiny, two brothers in Mumbai, then Bombay, started assembling Willys jeeps, a four-wheel drive that would free the country’s motorists from the perils of navigating its tough terrain.
J.C. Mahindra and K.C. Mahindra firmly believed that new modes of transport were key to the prosperity of a young nation. So when they sought a permit to assemble Willys jeeps in Mumbai, the idea was to build rugged, simple vehicles capable of tackling Indian roads.
In 1947, the Willys jeep flagged off Mahindras’ journey to the world stage. As early pioneers of globalization, the Mahindra brothers collaborated with a wide range of global companies over the decades as it grew to become one of the biggest industrial groups in India.
Two years earlier, the brothers had partnered Ghulam Mohammed to form Mahindra and Mohammed, a steel trading firm. After the Partition, Mohammed left for Pakistan to become its first finance minister in 1947 and the company changed its name to Mahindra and Mahindra in 1948.
Under K.C. Mahindra’s 13-year chairmanship, Mahindra and Mahindra established itself in several industrial sectors. His son Keshub Mahindra joined the company’s board in 1948 and became chairman in 1963.
Back in those days, India’s so-called licence raj had severely restricted what and how much one could manufacture through a series of controls and permits. Mahindra swam against the tide, entering new segments and diversifying into unrelated businesses. As the Green Revolution blossomed in the country’s fields in the 1960s, it entered the tractor business.
In 1981, Anand G. Mahindra, grandson of J.C. Mahindra and son of Harish Mahindra, returned to India with a management degree from Harvard Business School and joined Mahindra Ugine Steel Co. (Musco) as an executive assistant to the finance director. The young Mahindra swiftly rose through the ranks, furthering the group’s diversification drive with his fresh ideas.
Mahindra honed his management skills at Musco, steering the company into new businesses such as real estate and hospitality. He was appointed deputy managing director of Mahindra and Mahindra in 1991, the year India shook off the licence raj and kick-started economic reforms.
Soon enough, the group expanded into sunrise industries like information technology (IT), real estate, holidays and rural finance. Mahindra also initiated a programme to make the company efficient and aggressive in the age of liberalization. In 1994, the group undertook its first major restructuring exercise, dividing its businesses into six distinctive sectors. In April 1997, Anand Mahindra was appointed managing director.
At the dawn of the new millennium, Mahindra diversified further, entering retail and agri-businesses. The 2002 launch of Scorpio, its first sports utility vehicle which was designed and developed in-house, propelled Mahindra into a new era on design and engineering and took it, for the first time, to international markets.
From a small steel trading enterprise in 1945, the Mahindra group metamorphosed into a multi-billion rupee conglomerate in a few decades. Carefully crafted acquisitions—as many as 60 in the past seven years—in industries ranging from engineering and IT to aerospace and two wheelers—were at the heart of the group’s growth strategy.
Among the last decade’s major acquisitions were Punjab Tractors Ltd (2007), Kinetic’s two-wheeler business and Yancheng Tractor’s Huanghai, a Chinese tractor firm (2008), Satyam Computer Services Ltd, Australian aerospace firms Aerostaff Australia and Gippsland Aeronautics (2009), Korea’s Ssangyong Motor Co. and Reva Electric Car Co. (2010).
While some of these purchases led the company into newer segments, others helped in fortifying its position in existing ones. After being at the helm for nearly five decades, Keshub Mahindra handed over the reins to nephew Anand Mahindra, who took over as chairman and managing director on 9 August 2012.
Comprising as many as 140 companies across many countries, the group reported an aggregate revenue of $16.5 billion in the fiscal year ended 31 March. It was one of the toughest for the group’s flagship Mahindra and Mahindra Ltd, with passenger vehicles falling 10%, thanks to rising competition by foreign auto makers in the domestic market. Growth tapered also due to the increase in excise duty and the narrowing gap between petrol and diesel fuels, and poor economic sentiments which dissuaded buyers from new purchases.
As a result of the combination of adverse factors, Mahindra’s share in the utility vehicle space shrank to 43% in 2014 from 47.8% a year earlier. In order to recover the ground it has lost to rivals, the company plans to launch five new products over the next 15 months.
The group, meanwhile, plans to penetrate deeper into opportunities in sectors including rural prosperity, sustainable urbanization, mobility, tourism and leisure, digital transformation and security. Earlier this year, the group’s real estate arm, Mahindra Lifespace Developers Ltd, ventured into the low-cost housing space.
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