Mahindra & Mahindra picks up 55% stake in Meru for Rs 201 crore
The first tranche of investment will be made in October
After picking up a significant stake in Zoom car, Mahindra & Mahindra has picked up a majority 55% stake in Meru cabs for a cash consideration of Rs 201 crore in a bid to participate in the growing shared mobility space.
The first tranche of investment will be made in October of 2019. The investment in Meru is in addition to slew of shared mobility initiative mooted at the company right from Glyd, the EV ride sharing platform, Smart Shift, the tech enabled logistic solution provider and Mahindra Trringo, a market place that allows farmers to rent their tractors and equipment.
In terms of the agreement, after investment of the first tranche in Meru, Mahindra will have the right to appoint majority of the directors on the board of Meru and as such will control the composition of the board of directors of Meru.
Upon obtaining such right, Meru will become a subsidiary of the company, and the following subsidiary companies of Meru, will in turn, also become subsidiaries of the Company: Meru Mobility Tech, V-Link Automotive Services and V-Link Fleet Solutions.
Incorporated in December 2006, Meru has been under tremendous pressure over the last few years with Ola and Uber gaining strong acceptance in the market place. The fund infusion from Mahindra will not help Meru arrest the slide, but help Mahindra to have a much more active participation in the shared mobility space.
The consolidated revenues of Meru Travel solutions have almost halved to Rs 156 crore as against Rs 277.2 crore business it generated at the end of FY-17.
Meru is a holding entity and via its subsidiary companies operates in the ride hail segment and corporate transportation solutions space.
For the year ended 31st March, 2019, the consolidated revenue of Rs 156.6 crore at the end of FY-19, with Meru Mobility Tech generating Rs 114.6 crores, V-Link Automotive - Rs 3.3 crores and V-Link Fleet - Rs 46.6 crores.