Reva enters in a new era with Mahindra merger

Reva Electric, a well known electric car maker in India which has recently been acquired by the Mahindra Group, was started selling its vehicles in India since year 2001. The company was formed as a joint venture with two foreign companies- Detroit’s General Motors and Silicon Valley VC fund Draper Fisher Jurvetson (DFJ).

The company had recently entered into a tie-up with General Motors to manufacture the electric versions of GM's compact car Chevrolet Spark in India, which was a major success for the company as it was the first time that an Indian company would provide electric car technology to one of the largest car makers of US.

At present, the REVA is marketing its in 24 countries across the world automobile market, with an overall vehicle population of over 3500, arguably the largest EV fleet globally. REVA recently premiered its next generation electric car models, the NXR and NXG which received an enthusiastic response. Mahindra REVA will now have access to Mahindra's vehicle development technology and distribution network, significantly enhancing its ability to launch a state-of-the-art electric vehicle for global markets.

The decision of giving its control to the Mahindra group was a bit surprising for many market watchers as the company was doing very well at the time of this merger. On the other hand Mahindra group has strengthened its position in the Electric Vehicles domain with the acquisition of a majority stake in REVA Electric. The company will be renamed Mahindra REVA Electric Vehicle Co Ltd. Under the new agreement which was signed by both the companies, MM will own 55.2% equity in Mahindra REVA by a combination of equity purchase from the promoters and a fresh equity infusion of over Rs 45 crores (approx US $10 million) into the company. The buyout makes the Mahindra group a strong global player in the electric vehicle space.