Auto stock in focus after it completes acquisition of 87.7% stake worth over ₹180 Cr in DriveX Mobility

During Friday’s trading session, the shares of a leading global automaker in the two and three-wheeler segments are in focus, following its acquisition of an additional 0.32 percent stake in a two-wheeler distributor, raising its total holding to 87.7 percent. 

With a market cap of Rs. 1.16 lakh crores, the shares of TVS Motor Company Limited opened in the green at Rs. 2,459.8, as against its previous closing price of Rs. 2,458.95. 

What’s the News? 

TVS Motor Company Limited, in its latest regulatory filings with the stock exchanges, announced the acquisition of an additional 0.32 percent stake in DriveX Mobility Private Limited for a consideration of Rs. 80.31 lakhs. 

On 29th November, the company acquired a 39.11 percent stake in DriveX Mobility for nearly Rs. 97.8 crores. 

Initially, TVS Motor held a 48.27 percent stake in DriveX Mobility. With the completion of both transactions—acquiring 0.32 percent and 39.11 percent stakes—TVS Motor’s total holding in DriveX will increase to 87.7 percent. 

This acquisition allows TVS Motor to leverage its operational expertise to enhance the efficiency of DriveX Mobility’s business operations and serve the needs of the customers better. 

The acquisition is expected to be completed within 30 days from the date of execution of the Share Purchase Agreement. 

About the Target Entity: 

Incorporated in 2020, DriveX Mobility Private Limited is engaged in the business of procurement, refurbishment and retailing of pre-owned multi-brand two-wheeler motorcycles and scooters through its own stores (COCO) or through its franchisee dealers (FOFO). It is also engaged in trading of spare parts, accessories and engine oils for two-wheelers. 

As of FY24, it has 4 COCOs and around 50 FOFOs. DriveX has a presence across India through its FOFOs but predominantly operates in the Southern part of India spreading Karnataka, Tamil Nadu and Kerala. 

During FY24, DriveX reported a turnover of about Rs. 34 crores, a loss after tax of Rs. 30.98 crores, and a net worth of Rs. 43.3 crores. In comparison, its turnover was around Rs. 8.65 crores in FY22 and ~Rs. 5.8

crores in FY23. 

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Financials: 

TVS Motor Company reported a significant growth in revenue from operations, experiencing a year-on-year increase of nearly 14 percent, rising from Rs. 9,933 crores in Q2 FY24 to Rs. 11,302 crores in Q2 FY25. 

Similarly, the company’s net profit increased from Rs. 416 crores to Rs. 588 crores over the same period, representing a growth of around 41.4 percent YoY. 

Stock Performance: 

The stock has delivered positive returns of nearly 26 percent of returns in one year, as well as around 1.2 percent returns in the last six months. So far in 2024, the shares of TVS Motor Company have given positive returns of about 21.6 percent. 

About the Company: 

TVS Motor Company Limited is engaged in the business of manufacturing two-wheelers, three-wheelers, parts and accessories thereof. It has manufacturing plants located at Hosur in Tamil Nadu, Mysuru (Karnataka) and Nalagarh (Himachal Pradesh). 

Written by Shivani Singh 

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