Mahindra & Mahindra’s stake in its electric vehicle unit fell from 100% to 78.11% on September 1st after two investors converted preference shares into equity. The Indian carmaker’s subsidiary, Mahindra Last Mile Mobility Limited (MLMML), allotted 25.25m shares to the International Finance Corporation and India Japan Fund under agreements signed in 2023 and 2024.
IFC received 15.73 million equity shares from converting ₹600 crores worth of preference shares, while IJF obtained 9.52 million shares from converting ₹400 crores of preference shares. Despite the reduced stake, MLMML remains a Mahindra subsidiary.
Financial Performance
According to Mahindra’s disclosure, MLMML contributed ₹3,767.02 crores or 2.4% to the parent company’s consolidated turnover for the financial year ending March 2025, after eliminating intercompany transactions. The unit reported a net worth of ₹967.63 crores, representing 1.5% of Mahindra’s consolidated net worth.
The company disclosed that it operates in India’s electric three-wheeler segment, providing last-mile passenger and cargo transport solutions. MLMML commenced commercial operations in September 2023 following asset transfers from its parent company.
Both investors bring development finance expertise to MLMML’s operations. IFC, a World Bank Group member, focuses on private sector investments in emerging markets and operates in more than 100 countries. Meanwhile, IJF represents a bilateral fund between India and Japan, with the Government of India contributing 49% and Japan Bank for International Cooperation holding 51%.
IJF concentrates on environmental preservation sectors including renewable energy and e-mobility businesses. The fund also promotes Japanese company investments in India across various sectors.
Regulatory Context
Mahindra disclosed the stake changes through regulatory filings to stock exchanges in Mumbai, Luxembourg, and London, complying with Securities and Exchange Board of India listing requirements. The company noted that no direct sale transaction occurred, as the dilution resulted from mandatory preference share conversions.
Neither IFC nor IJF belong to Mahindra’s promoter group, and the conversions do not constitute related party transactions under current regulations. The preference share conversions represent the completion of investment rounds designed to provide additional capital for MLMML’s growth in India’s electric commercial vehicle market.