Mahindra Last Mile Mobility Gears Up for IPO Within Few Years, Announces MD Anish Shah

Key Highlights:
•    Mahindra & Mahindra will take its Last Mile Mobility Business public with Rs 1000 crore investment.
•    Mahindra Accelo will enter capital markets first, followed by the Last Mile Mobility Business.
•    M&M sold over 100,000 vehicles in last-mile mobility in FY 2023-24.
•    The company is investing in new products and capacity in Zaheerabad.
•    Electric three-wheeler market penetration is expected to increase by 40-50%, despite rising competition.

Mahindra & Mahindra is prepared to take its very successful Last Mile Mobility Business public in the coming years, following a large cash infusion of about Rs 1000 crore from external investors.

During the Q4 FY24 results call, Mahindra & Mahindra's MD, Anish Shah, highlighted the company's capital market strategy. He stated that Mahindra Accelo, the recycling arm, will most likely be the first to realize its promise in the financial markets. Following that, Shah stated that the Last Mile Mobility Business is likely to make its capital market debut through an IPO, although specific timelines were not disclosed.

Growth and Market Performance

M&M's last-mile mobility arm sold more than 100,000 vehicles during fiscal year 2023-34. According to Rajesh Jejurikar, ED and CEO of Mahindra & Mahindra's auto and farm division, the electric three-wheeler business has increased fourfold in the previous two years, and the company maintains a significant market share.

"We have aggressive growth goals. So, there is work being done on next-generation platforms and new products for the future. All of the investment is going into developing resources and products in the Zaheerabad ecosystem," said Jejurikar.

The Last Mile Mobility sells electric three-wheelers and small mini trucks to meet the needs of the thriving e-commerce industry.

Market Dynamics and Competition

Jejurikar addressed the impact of increased competition in the electric three-wheeler (E3W) category, noting that growth is currently in the low double digits. 

"We feel the category penetration is only 11 per cent. This category has the biggest possibility of electrifying due to a compelling customer value proposition. We believe that the more participants participate, the bigger the chance to electrify faster," he added. 

As more players enter the market, M&M anticipates that market share may decline slightly but expects overall growth momentum to accelerate, which is crucial for the industry's evolution.

The company stated that its recently launched Treo metal body three-wheeler has received a very positive response. Jejurikar also stated that the number of electric three-wheelers is expected to expand by 40-50% in the near future. 

"Now, when that happens, we expect market share to fall because there is already one new competitor, but we feel that working together can restart growth momentum. As a result, we anticipate that market share will stabilize at a healthy level. But quantum growth in volumes is what we'd expect," he said.

Also Read: Electric Three-wheeler L5 Sales Report April 2024: MLMM emerges as the top choice.

CMV360 Says

Mahindra & Mahindra's investments and IPO plans show its commitment to the electric vehicle market. The substantial growth in the Last Mile Mobility Business, particularly in the electric three-wheeler segment, positions the company well to capitalize on the growing demand for sustainable transportation solutions. 

As competition intensifies, M&M's focus on innovation and capacity expansion will be pivotal in maintaining its leadership and driving industry-wide growth.