Want to be in mode of rapid growth, open to inorganic opportunities – Anish Shah, MD Mahindra & Mahindra

Mahindra & Mahindra is open to inorganic opportunities in its automotive business, says Anish Shah - MD of the company but states that the "bar for acquisition is high"

The maker of XUV 700 and Scorpio which has made remarkable comeback in volumes and market share over the last three years organically has seen its volume more than double and it is already the number 2 SUV maker in volumes and number1 SUV maker in terms of revenues.

"We will acquire because we do want to be in the mode of rapid growth, but we will acquire only when we feel that it is a very strong strategic benefit and we will be able to deliver on what we said why we acquired," explained Shah to the media in post Q2 FY-24 earnings call.

Over the last few years, M&M exited the South Korean car maker SsangYong Motor Company and also called its proposed joint venture with US car Ford Motor Company.

"If you look at the past, the issue was not why we acquired those companies, some of those were very good acquisitions - the issue was we had not delivered on what had been said at that point in time - if we had delivered - everyone would have been very happy. We have to make sure, when we commit, that the bar is set high, if we can deliver, we will go out and acquire," elaborated Shah.

The query was raised at a time when M&M was sitting on cash of close to Rs 20000 crore in its kitty. The company in fact retired about 2500 crore debt during Q2 of FY-24 and post-paying of dividend, Mahindra still has a cash reserve of about Rs 16000 crore.

Shah stated that the company will be coming out with its fresh investment for the next three years and share how the company intends to deploy some of that cash in business and how it intends to give back to the shareholders.

"Our focus right now is to ensure that, all our business have the ability to grow in a significant way. Our approach is to drive significant growth. We are not looking at business outside our footprint. The question is that if you are going to use that fund and invest in something else, the answer is no. With Auto business and electric, we are going to put more investment in electric, we will come back with a number for the next three-year cycle, as we complete this cycle," added Shah.

This year, the company has invested little over Rs 2200 crore and has got infusion of about Rs 900 crore from the private equity majors in its EV business.