Mahindra witnesses investors divide over Ssangyong acquisition

The country's largest utility vehicle maker Mahindra & Mahindra is witnessing a strong divide of its investors over the prospective investment of the company in the revitalisation of bankrupted Korean automaker Ssangyong. It is to be mentioned here that Mahindra has recently been chosen as the 'preferred bidder' for the acquisition of this Korean firm by its domestic management. The division of investors has not only troubled the acquisition of this Korean automaker by the company but also engendered the company's foray into commercial truck manufacturing business.

Mahindra group has been involved in a number of acquisitions and joint ventures in last few years. The company has not only entered into the two-wheeler business but also has initiated the process of entering in the small, medium and heavy truck business in the Indian market. In the two-wheeler segment, it is performing far better then the expectations by selling a comparatively high number of its scooters like Mahindra Rodeo and Duo. On the other hand, in the truck business, the company is all set to take on the likes of Tata Motors and Ashok Leyland. So far in this year, the company's shares have shot up as much as 14.5 percent and are expected to grow even higher in coming months.   

As per the market analysts, the share value and cash flow of the company may witness an under performance in coming months due to the multiple acquisitions by the company simultaneously. It is also estimated that it will take as many as 2 to 3 years for M&M to come-out with a significant benefit from the ongoing Ssangyong acquisition and thus the company will need to invest substantially in the product development process.   

At present, the company sells three of the most popular utility vehicles in the Indian market including Mahindra Scorpio, Mahindra Bolero and Mahindra Xylo.