Mahindra & Mahindra owned subsidiary, Mahindra Holdings Ltd. (MHL) has sold its 100% equity stake in Mahindra First Choice Services (MFCS) as well as in Auto Digitech Private Ltd. (ADPL) to TVS Automobile Solutions Pvt Ltd. (TVS ASPL) for Rs 21.5 crore and Rs. 13.5 crore respectively. In its regulatory filing today, M&M said- "MFCS and ADPL have ceased to be subsidiaries of MHL and of the Company with effect from 25th February 2021."
As part of the transaction, Mahindra will secure a stake in TVS Automobile Services, and in turn, First Choice will become a subsidiary of TVS ASPL. This 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.
For the people not in know, Mahindra First Choice Services was a multi-brand service workshop for cars & bike of all makes and models. It has a pan-India network of 475+ franchise partners and 100+ distributors present in over 350 towns across 25 states and 2 union territories (UT). The TVS Automobile Solutions, on the other hand, runs India’s largest independent workshop brand under the myTVS banner. The company has a stronghold in the southern part of the country.
The Indian independent automotive aftermarket has been growing at a CAGR of 7-10% over the past 5 years. The market is highly fragmented with over 40,000 retailers, 100,000 garages, and thousands of small distributors across the country. The acquisition of Mahindra First Choice is expected to bring about synergies in the independent aftermarket services sector.