Mahindra & Mahindra, external investors to invest Rs 875 crore in Classic Legends

Indian conglomerate Mahindra & Mahindra (M&M) said that the company, along with external investors, have committed to investing Rs 875 crore in Classic Legends, a subsidiary of M&M.

The company said the investment will be distributed over the next two to three years. M&M will invest Rs 525 crore, while the remaining Rs 350 crore will come from existing and new investors.

Purpose of the investment

According to the company's statement, the funds will be used to strengthen Classic Legends' business, focusing on leveraging the strengths of M&M and its partners. 

Classic Legends, known for reviving iconic motorcycle brands like Jawa, Yezdi, and BSA, plans to use this investment for various business activities, including design, development, sales, marketing of two-wheelers, and related activities. The development is part of a broader strategy to turn around the two-wheeler business and make it profitable, it said.

How well is Classic Legends performing financially?

Classic Legends, which has operations in India and the UK, reported a revenue of Rs 709.74 crore for the fiscal year ending March 31, 2023.

The figure represents a continuation of the company's revenue growth over the past few years. Specifically, from the fiscal year 2021 to 2022, the company's revenue surged from Rs 439.46 crore to Rs 594.99 crore, an increase of 35.39%.

Despite its efforts, Classic Legends faces stiff competition in the premium motorcycle segment, primarily from Royal Enfield, the market leader in the 350cc+ category. The investment aims to bolster Classic Legends' position in this competitive market.

How will the investment impact shareholding?

Post-investment, M&M will continue to hold a 60% stake in Classic Legends, ensuring that it remains a subsidiary of M&M. The company added that the investment is expected to be completed by March 15, 2025. It also plans to introduce new products, including a fully electric motorcycle under the British motorcycle brand BSA.

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