MAHINDRA & MAHINDRA LTD. Consolidated Accounts 417 40. Significant acquisitions and changes in ownership During the year, the Group has sold investments in New Delhi Centre for Sight Limited (NDCFS). Post stake sale, NDCFS ceased to be a joint venture of the Company. 41. Compulsory Convertible Preference Shares (CCPS) issued by Mahindra Electric Automobile Limited (MEAL) and Mahindra Last Mile Mobility Limited (MLMML) (a) Mahindra Electric Automobile Limited (MEAL), a subsidiary of the Company is engaged in the business of four-wheel passenger electric vehicles. In accordance with and subject to the terms and conditions stipulated in the Securities Subscription Agreement and Shareholders’ Agreement entered with British International Investment Plc (BII) [SSA and SHA] , BII invested Rs. 1,850.00 crores as at 31st March 2025 (2024: Rs. 1,200.00 crores) in 0.001% Compulsory Convertible Preference Shares (CCPS) of MEAL. In accordance with and subject to the terms and conditions stipulated in the amended and restated Securities Subscription Agreement and Shareholders’ Agreement entered with British International Investment Plc (BII) and Jongsong Investments Pte Ltd (“Temasek”) [amended and restated SSA and SHA], Temasek invested Rs. 1,200.00 crores as at 31st March, 2025 (2024: Rs. 300.00 crores) in 0.001% Series A Compulsory Convertible Preference Shares (Series A CCPS) of MEAL. Unless agreed to, in writing, for an early conversion, each CCPS and Series A CCPS is compulsorily and automatically convertible into such number of equity shares as determined as per a pre-determined formula at the conversion date, as per terms and conditions of the agreement(s) entered between the Company, BII and Temasek. Since the CCPS and Series A CCPS are convertible into variable number of equity shares of MEAL, it has been classified as financial liability at fair value through profit or loss in the financial statements of MEAL and in the consolidated financial statements of the Company. Further, in accordance with the shareholders’ agreement, the Company shall take best efforts to provide BII and Temasek with a complete exit between 1st November, 2027 and 1st November, 2030 through certain exit options (or a combination thereof), as may be determined by the Company in its sole discretion. In case exit has not been provided to BII prior to 1st November, 2030, BII shall have the right upto 31st October, 2031 to require full exit to be provided by the Company or by its affiliates and/or a third party at the higher of fair market value and the amount invested by BII. In case exit has not been provided to Temasek prior to 1st November, 2030, Temasek shall have the right up to 31st October, 2031 to require full exit to be provided by the Company by way of share swap if the fair market value of the Temasek interest is higher than the amount invested by it. However, the Company shall have the right, at its sole discretion, to provide cash exit to Temasek at the higher of fair market value of the Temasek interest and the amount invested by it. Further, if the Fair market value of the Temasek interest is lower than its investment amount, neither the Company nor Temasek shall be obligated to undertake their respective obligations with respect to the Share swap. (b) Mahindra Last Mile Mobility Limited (MLMML), a subsidiary of the Company is engaged in the business of last mile mobility through cargo and passenger vehicles. In accordance with and subject to the terms and conditions stipulated in the Securities Subscription Agreement and Shareholders’ Agreement entered with International Finance Corporation (IFC), IFC invested Rs. 600.00 crores as at 31st March, 2025 (2024: Rs. 300.00 crores) in Compulsory Convertible Preference Shares (CCPS) of MLMML. Further, in accordance with and subject to the terms and conditions stipulated in the amended and restated Securities Subscription Agreement and Shareholders’ Agreement entered with International Finance Corporation (IFC) and India-Japan Fund (“IJF”), IJF invested Rs. 400.00 crores as at 31st March, 2025 (2024: Rs. 200.00 crores) in Compulsory Convertible Preference Shares (Series A CCPS) of MLMML. Unless agreed to, in writing, for an early conversion, each CCPS and Series A CCPS is compulsorily convertible into such number of equity shares as determined as per a pre-determined formula at the conversion date, as per terms and conditions of the agreement (s) entered between the Company, IFC and IJF. Since the CCPS and Series A CCPS are convertible into variable number of equity shares of MLMML, it has been classified as financial liability at fair value through profit or loss in the financial statements of MLMML and in the consolidated financial statements of the Company. Further, in accordance with the shareholders’ agreement, the Company and MLMML shall take best efforts to provide IFC and IJF with a complete exit at fair value during the exit period, being the period between 5th and 7th anniversary from the date of IFC’s first investment, through certain exit options as may be determined by the Company in its sole discretion. If IFC continues to hold any equity security of MLMML after the expiry of the exit period, IFC shall have the right to require MLMML to complete an initial public offering subject to favourable market conditions.
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