Meru to Consider Merger with Mahindra Group Company
Following its complete acquisition of the radio taxi fleet operator, Mahindra & Mahindra may merge Meru with a group company – most likely Mahindra Logistics – to bring operational synergies and efficiencies.
Because Mahindra Logistics is in the business of supply chain and enterprise mobility, which includes diverse industry verticals such as consumer goods, e commerce, and pharmaceuticals, the synergies with the logistics arm could be multifaceted.
After being severely impacted by the Covid-19 pandemic, the company has been on the mend and has been earmarked for rapid growth.
M&M may also put Meru's fundraising plans on hold. The taxi fleet operator had begun funding discussions with companies such as Orix Auto Infrastructure Services, a Japanese car leasing firm. The discussions between Meru's ex-promoter for a possible stake sale to raise around Rs 350-Rs 400 crore had progressed.
According to a source involved in the fundraising deal, M&M does not want to burn any more capital and has no appetite for additional risk.
It is too early to comment on the short-term revival of the demand cycle in both the business-to-consumer (B2C) and business-to-business (B2B) segments as the company gradually emerges from lockdown-like restrictions and considers long-term business growth opportunities, a company spokesperson said.
Meru's investors, private equity firm True North and promoters Neeraj Gupta and Farhat Gupta, have left the company after selling their stakes to M&M.
M&M intends to grow the mobility services sector to a Rs 20,000 crore (by value) business by 2025. The segment is divided into three key verticals: Transport as a Service (TaaS), Vehicles as a Service (VaaS), and Mobility as a Service (MaaS).
“It makes sense for Meru to play in the high-end, niche or the B2B space and stay away from the mass segment,” said VG Ramakrishnan, managing director of Avanteum Advisors.
Post-Covid-19, there has been a downturn in the B2C segment and Meru would not like to burn any more money, he added.
Meru will concentrate entirely on its B2B business targeting corporate houses and will take its time with consumers. The purpose of the new business module will be to create synergies between the various Mahindra businesses.
M&M is already an investor in self-drive car rental platform Zoom Car India and has integrated Meru EVGO and Mahindra’s electric vehicle platform Glyd for city and outstation travel.
Because Mahindra Logistics is in the business of supply chain and enterprise mobility, which includes diverse industry verticals such as consumer goods, e commerce, and pharmaceuticals, the synergies with the logistics arm could be multifaceted.
After being severely impacted by the Covid-19 pandemic, the company has been on the mend and has been earmarked for rapid growth.
M&M may also put Meru's fundraising plans on hold. The taxi fleet operator had begun funding discussions with companies such as Orix Auto Infrastructure Services, a Japanese car leasing firm. The discussions between Meru's ex-promoter for a possible stake sale to raise around Rs 350-Rs 400 crore had progressed.
According to a source involved in the fundraising deal, M&M does not want to burn any more capital and has no appetite for additional risk.
It is too early to comment on the short-term revival of the demand cycle in both the business-to-consumer (B2C) and business-to-business (B2B) segments as the company gradually emerges from lockdown-like restrictions and considers long-term business growth opportunities, a company spokesperson said.
Meru's investors, private equity firm True North and promoters Neeraj Gupta and Farhat Gupta, have left the company after selling their stakes to M&M.
M&M intends to grow the mobility services sector to a Rs 20,000 crore (by value) business by 2025. The segment is divided into three key verticals: Transport as a Service (TaaS), Vehicles as a Service (VaaS), and Mobility as a Service (MaaS).
“It makes sense for Meru to play in the high-end, niche or the B2B space and stay away from the mass segment,” said VG Ramakrishnan, managing director of Avanteum Advisors.
Post-Covid-19, there has been a downturn in the B2C segment and Meru would not like to burn any more money, he added.
Meru will concentrate entirely on its B2B business targeting corporate houses and will take its time with consumers. The purpose of the new business module will be to create synergies between the various Mahindra businesses.
M&M is already an investor in self-drive car rental platform Zoom Car India and has integrated Meru EVGO and Mahindra’s electric vehicle platform Glyd for city and outstation travel.
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