"Farm Equipment Sector (FES), a part of Mahindra group, has forayed into the agricultural equipment rental services with Trringo that will operate as a franchisee based model and will effectively bring in new age digital technology to the tractor rental business," M&M said in a regulatory filing.
The company plans to invest upwards of Rs 10 crore on the new venture and intends to enter five states in the current year, it added.
M&M Executive Director Pawan Goenka said in India where farm mechanisation penetration is low, Mahindra would like to play a significant role in enabling farmers to improve their productivity by providing accessible technology.
"The Trringo farm equipment rental business model will enable farmers to deploy mechanisation technology on a pay per use basis without investing in the asset. This will increase their output and prosperity and lead to the inclusive growth of the nation," he added.
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As part of first model, Trringo will use a proprietary digital platform as an enabler to process orders and pass them on to the nearest franchisee through location based mapping.
Franchisee could also tie-up with tractor owners in the vicinity enabling them to rent out equipment to farmers on a commission basis.
Large farmers who own expensive, high-end equipment can rent out their assets thereby optimising utilisation based on seasonality, cutting across geographies, the company said.
M&M shares were trading at Rs 1,213.80 apiece on the BSE, down 0.50 per cent from previous close.