Mahindra & Mahindra Ltd said on Tuesday it has agreed to buy a 26% stake in MITRA Agro Equipments Pvt. Ltd for up to Rs 8 crore ($1.25 million) in cash to expand its portfolio of agricultural equipment.
MITRA Agro will issue new shares to Mahindra for the stake, India’s biggest tractor maker said in a stock-exchange disclosure.
The deal will help Mahindra enter the sprayers’ business and cater to orchard and vineyard farmers, said Rajesh Jejurikar, president of farm equipment sector at the company.
Devneet Bajaj, founder and CEO of MITRA, said the transaction will help the company scale up its operations across India and relevant export markets.
MITRA was incorporated in 2012 as Kisaan Mobile Mandi Pvt. Ltd. It designs and makes proprietary agriculture machinery for horticulture farmers. The company’s products include air-blast sprayers, boom sprayers, dusters and potato harvesters.
In 2014, early-stage agri-tech fund Omnivore Capital had invested $1.4 million (Rs 8.7 crore) in MITRA, according to VCCEdge, the data research platform of VCCircle. Omnivore will stay invested in MITRA, Mahindra said.
MITRA had revenue of Rs 14 crore for the financial year ended in March 2017.
The transaction is likely to close in February, Mahindra said.
Mahindra, also the country’s biggest maker of sport-utility vehicle, has struck a few overseas acquisitions over the past year to grow its farm equipment business.
In December 2017, the company invested in Finland-based startup Medixine Oy, according to VCCEdge. In September 2017, the company signed a pact to acquire Turkish tractor maker Erkunt Traktör Sanayii AŞ and its affiliate Erkunt Sanayi AS.
In January 2017, Mahindra had agreed to acquire a 75.1% stake in Turkish farm machinery maker Hisarlar Makina Sanayi Ve Ticaret AS.