Shares of leading SUV maker Mahindra and Mahindra fell as much as 6 percent on February 21, setting it up for the biggest weekly fall in five years.
There has been a slew of news flow concerning investors, including increasing competition in the EV space, possible over-valuation of the stock price, and company's recent plans of investing in the rights issue of two of its listed subsidiaries. However, Geojit Financial spoke on the same saying Tesla's unlikeliness to even match up to M&M's pricing, distribution or services.
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The board of M&M has on February 20 given its nod to subscribe to Mahindra & Mahindra Financial Services and Mahindra Life Space Developers' respective rights issues. MMFSL is looking to raise up to Rs 3,000 crore, while Mahindra Life aims to secure Rs 1,500 crore through rights issues.
Despite the recent decline, 37 out of 40 analysts covering Mahindra & Mahindra have maintained a 'buy' call on the stock, with consensus forecasts suggesting a potential upside of 35.5 percent from present value.
M&M's recently-launched electric SUVs received an overwhelming response of over 30,000 bookings on the very first day that it opened for orders. The total value of these bookings amounts to Rs 8,472 crore (based on ex-showroom prices).
The Nifty Auto index, meanwhile, has been under selling pressure on reports that the Centre is considering reducing import duty on electric vehicles, in an effort to attract wider global participation in the space. The automobile import duty might fall from 110 percent to 15 percent under the new EV policy, said reports, as Tesla gears up for an India forway in a couple of months.
Apparently, Tesla Inc's efforts have gained momentum to enter the Indian market care segment through direct imports instead of committing to local manufacturing in near-term.
Shares of M&M have been under pressure, down 18 percent in two weeks from its recent peak of Rs 3,270, seen on February 10.
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