The Mahindra Group, a diversified conglomerate with interests spanning farm equipment to aerostructures, is setting its sights on delivering scale with its businesses over the next decade. Managing Director and CEO Anish Shah revealed the group’s ambitious growth plans, emphasizing a focus on key sectors expected to account for 70% of India’s growth in the coming years.
Having streamlined its operations by exiting 15 companies, Mahindra Group has emerged leaner and more agile. Shah highlighted the group’s intention to amplify the valuation of its emerging businesses, termed “growth gems,” by five times within the next five years. As of March 2024, these growth gems are valued at USD 4.2 billion.
“Today, we have a set of companies that are very strong and well-positioned in the market, each with the potential to become a scale company,” Shah stated. He further elaborated, “Our focus now is to deliver scale by concentrating on the businesses we have. These businesses cover what we believe is 70% of India’s growth over the next decade. Therefore, we are very well positioned to grow with India, and that’s our goal for 2030.”
In the automobile and farm equipment sectors, Mahindra Group plans to leverage its market leadership. Concurrently, the group aims to unlock the full potential of Tech Mahindra (TechM) and Mahindra Finance, both of which have underperformed in recent years but possess strong foundations. “Mahindra Finance is already showing great progress in its turnaround and has a year to go before it completes its turnaround. TechM has started its turnaround,” Shah noted.
The growth gems include 10 businesses, three of which are listed entities—Lifespace, Logistics, and Holidays. The remaining seven unlisted entities encompass last-mile mobility, farm machinery, aerostructures, Classic Legends, Susten (solar business), and Accelo (vehicle recycling business). These businesses have collectively grown fivefold in valuation over the past four years, from USD 0.8 billion in March 2020 to USD 4.2 billion in March 2024.
“Our growth gems have already grown 5x in valuation in the last four years. We aim to grow them 5x more to bring scale to these businesses,” Shah said. He also hinted at the possibility of initial public offerings (IPOs) among the unlisted entities, particularly for Accelo, which focuses on decarbonizing the auto industry. However, he stressed that building scale and preparing these businesses to operate independently precedes any plans for listing.
Shah revealed that the Mahindra Group is exploring entry into a new business area, although no specific industry has been identified yet. “We don’t have a real answer on the new area right now. What we have signalled to our investors is that we will get into one new area,” he explained. The group will only venture into a new sector if it can add significant value and meet its high standards for return on investment and scalability.
“It has to generate returns greater than what the rest of the industry can generate. It has to be something at scale. Only then will we get into it; if we don’t find something that meets this criteria, then we won’t. We are already putting significant investments into our current set of businesses, and they are very well positioned,” Shah concluded.
The Mahindra Group’s focused approach on scaling existing businesses while judiciously exploring new opportunities underscores its commitment to contributing significantly to India’s economic growth over the next decade.
