M&M To Raise Rs 400 Cr For Its JV With Navistar

Mahindra & Mahindra is planning to raise upto Rs 400 cr over the next 3-4 months for Mahindra Navistar Automotive Ltd. MNAL is 51:49 JV between M&M and US based Navistar Inc.

M&M also needs another Rs 900 cr for Mahinda Vehicle Manufacturer Ltd. The investmentis a part of the total of Rs 2500 cr invetsment for the Chakan plant.

M&M is also looking at investing Rs 1,000 crore for capacity enhancement at its plant andproduct development in order to meet the emission norms.

M&M has a capex of Rs 6,500-7,000 crore for the next three years including the current fiscal. In order to fund its capex the company is also looking at divestment of its 51% stake it holds in its profitable subsidiaries..

MNAL will roll out medium and heavy trucks in the fourth quarter from the Chakan plant and some time during the current quarter M&M will roll out its own light commercial vehicle from its plant at Zaheerabad in Andhra Pradesh. The debt to equity ratio for the JV stands at 0.7:1.

Annualised capacity at Chakan is 3,00,000 units of which 2,50,000 units will be for M&M products and 50,000 for MNAL products.

M&M also has 51:49 JV with Renault. The JV produces and sells Logan in India. The JV is reported to be in trouble as the sales of Logan has been dipping in the recent past. September saw a 71% dip in the sales.

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