Mahindra First Choice Services Ltd. (MFCSL), a pan-India chain of multi-brand car and twowheeler service workshops, part of the $19.4 Bn Mahindra Group, on Thursday announced a plan to integrate its operations with TVS Automobile Solutions Pvt. Ltd., (TASL), India’s leading independent automotive aftermarket player.
As per the plan, Mahindra Holdings Limited, a wholly owned subsidiary of the Company will divest its entire stake held in MFCS and its subsidiary Auto Digitech Private Limited (ADPL) to TASL, which houses ‘myTVS,’ a multi-brand independent automobile aftermarket player that offers integrated solutions across the aftermarket value chain. As a part of the transaction, the Company will secure a minority stake of 2.76 per cent in TASL and in turn, MFCS and ADPL will become subsidiaries of TASL. Mahindra will invest Rs.35 crore for the share acquisition.
The move will enable the respective organisations to combine their strengths to organise the highly fragmented automobile aftermarket services space in India, thereby providing superior value to customers, channel partners, employees and other stakeholders.
“Additionally, the Company will have an earn-out right linked to conversion of Series V CCPS to increase stake of the Company in TASL. The number of equity shares upon conversion of Series V CCPS would depend upon the milestones to be achieved upto 31st March, 2024” said Mahindra.
The transaction is subject to regulatory approvals, including an approval from the Competition Commission of India (CCI).
“I am delighted with this deal as two great brands have come together for the benefit of the overall aftermarket ecosystem. India’s $10 bn aftermarket segment is fragmented and needs strong support for relevance and growth amidst changing technology landscape in the automotive sector. We would take this opportunity to bring thousands of entrepreneurs into a digital platform wherein they can get benefited from digital technologies across marketing, diagnostics, customer experience, quality parts, access to training and digital payments. I am sure this partnership will be a win-win proposition for all the stakeholders” Said Mr. R. Dinesh, Director, TVS Automobile Solutions Pvt. Ltd.