Canadian pension fund CDPQ buys M&M shares worth ₹1,244 cr

Mumbai: Mahindra and Mahindra (M&M) Benefit Trust has sold 19.2 million shares of auto maker Mahindra and Mahindra Ltd, amounting to ₹1,244 crore, to Canada’s second largest pension fund Caisse de Dépôt et Placement du Québec (CDPQ), the company said in an exchange filing on Monday.

CDPQ manages funds for several public and para-public organisations, mainly pension and insurance plans, in Quebec, Canada. CDPQ, which was created in 1965, today manages more than C$309.5 billion, with investments in as many as 60 countries.

The M&M Benefit Trust was created in July 2008. The shares held by the trust were the outcome of various mergers and schemes of amalgamation. The trust holds 103.6 million shares of the firm.

“As the Benefit Trust holds M&M shares for the benefit of its shareholders, it has decided to monetize part of the holding by divesting to a long-term, high-quality investor. This is the first investment by CDPQ in the Mahindra Group, reposing its faith in the future prospects of the company and the Indian economy in general,” said V.S. Parthasarathy, chief financial officer of Mahindra Group.

The proceeds of the sale would be transferred to M&M, which would be used by the company for various operational requirements. Post the transaction, the M&M Benefit Trust will hold 84.4 million shares, representing 6.8% of the equity capital of the company.

“We are excited to partner with the Mahindra Group in this first investment and are looking forward to further developments in this strategic partnership as we grow our portfolio in India and across the world. We believe that the long-term value creation approach of the Mahindra Group aligns well with CDPQ objectives and perspective as a global institutional investor,” said Anita George, executive vice-president, growth markets and strategic partnerships, CDPQ.

CDPQ’s other investments in India include renewable energy producers such as Azure Power and CLP India, Edelweiss group’s non-banking financial services arm, TVS Logistics, and Kotak Mahindra Bank.

On Monday, shares of Mahindra & Mahindra closed at ₹653.9 per share, up 1.05% on BSE, while the benchmark Sensex closed at 40,267.62 points, up 1.39%.