Mahindra & Mahindra rose 1.24% to Rs 1037.05 at 14:51 IST on BSE after the company said its Agri division signed a joint venture agreement with Holland-based HZPC.
The company made the announcement during trading hours today, 23 April 2014.
Meanwhile, the BSE Sensex was up 72.91 points, or 0.32%, to 22,831.28.
On BSE, so far 32,000 shares were traded in the counter, compared with an average volume of 80,569 shares in the past one quarter.
The stock hit a high of Rs 1,040.90 and a low of Rs 1,024.70 so far during the day. The stock hit a 52-week high of Rs 1,054 on 18 March 2014. The stock hit a 52-week low of Rs 741.50 on 28 August 2013.
The stock had outperformed the market over the past one month till 22 April 2014, rising 5.15% compared with the Sensex's 4.61% rise. The scrip had also outperformed the market in past one quarter, rising 11.82% as against Sensex's 6.66% rise.
The large-cap company has an equity capital of Rs 307.94 crore. Face value per share is Rs 5.
The Agri division of Mahindra & Mahindra (M&M) signed a joint venture (JV) agreement with HZPC, Holland, one of the leading innovative companies in the world in potato breeding, seed potato growing and seed potato trading to offer the best quality seed potatoes to farmers within and outside India. The joint venture will have Mahindra and HZPC holding 60% and 40% equity respectively in the company, subject to the parties receiving all applicable approvals.
Speaking on the occasion, Ashok Sharma, Chief Executive, Agri & Allied Businesses, M&M said. "To further grow this business. we will require special technology and will also need to put in some investments in the supply chain. It is therefore a matter of great pride for us that we have signed this JV with HZPC Holland being one of the leading and the most advanced Seed Potato companies in the world. Not only will this help in our quest for delivering farmer prosperity through agronomy and better technology but will also open up global markets, thus providing our farmers with better returns."
According to Mr. Gerard Backx, CEO, HZPC, "We are honored to associate with Mahindra's Agri business division. We feel confident that this JV will help us provide high quality seeds and new varieties to the seed potato growers in India and also open up export avenues for them. HZPC is a farmers' company with its majority equity held by farmers. We have already sent 19 latest varieties from Europe for testing in India and are sure that some of them will go a long way in enhancing farmer productivity in the country."
The joint venture will benefit from the expertise of both companies where HZPC with their strong R8-D focus will bring in access to latest technology, new varieties and open up global markets for the Indian farmers. Mahindra will contribute through their strong farmer connect, wide spread domestic distribution and agronomy expertise. The new company will construct a state of the art facility to produce Tissue culture plants and Mini-tubers. The aim of the facility is to offer high quality mini-tubers and early generation seed potatoes to the farmers, M&M said in a statement.
Mahindra started its Seed Potato business in the year 2005 with the vision of helping the seed potato growers in Punjab increase their productivity and realize better returns for their seeds. Today, the company works closely with over 600 seed potato growers through contract farming arrangements. Their strong agronomy interventions have helped farmers increase their productivity and quality of produce. The company supplies farmers with high quality mini-tubers which are produced at their facility in Palampur (HP). The seeds are bought back from the farmers at a minimum guaranteed price and are further distributed through a well spread out network to potato growers in Uttar Pradesh, Madhya Pradesh, Gujarat, Maharashtra & West Bengal, the company said.
The total Potato market in India is estimated to be around 43 million tones, and approximately 10% of this is used as seeds by farmers. Thus the potential of seed potato market is more than 4 million tones, of which only 0.25 million tones is currently organized. While the organized sector is growing at a CAGR of 15% to 17%, the overall seed potato industry is expected to grow by around 6% CAGR. With such a huge market potential and few organized players in this space, this JV has a huge potential to revolutionalise the seed potato production in India, the company added.
HZPC Holland is one of the most innovative world players in potato breeding, seed potato growing and trading. HZPC breeders develop potato varieties that optimally match with local climate and soil conditions. HZPC is a farmer oriented world player with 250 fellow-workers in over 10 countries and is owned by the majority of its 800 international seed potato growers and co-workers. HZPC has a turnover of almost 300 million Euro and has been in existence for over a 100 years. HZPC varieties and seed potatoes are aimed at ensuring potato growers across the world grow, develop and operate in an environmentally sustainable way.
Mahindra Agri Business Division was established in the year 2010, with the vision of delivering Farmer Prosperity by offering a complete integrated solution to the farmers. The division constitutes of M&M's Agri input businesses like Seeds, Crop Care & Seed Potato. Mahindra Snubhlabh Services, a 100% subsidiary of M&M is in the fresh fruits business and is the No. 1 exporter of table grapes from India. EPC Industries Ltd. is the Micro Irrigation business that offers drip. sprinkler, pumps and green house solutions. Through a well distributed Samriddhi center network that offers soil testing, agronomy and other services, the business aims to be a one stop shop solution for all farmer needs.
M&M's consolidated net profit declined 1.93% to Rs 1230 crore on 8.5% growth in gross revenue and other income to Rs 20679.90 crore in Q3 December 2013 over Q3 December 2012. On a like to like basis, M&M's consolidated revenue rose 11.7% in Q3 December 2013 over Q3 December 2012.
The Mahindra Group focuses on enabling people to rise through solutions that power mobility, drive rural prosperity, enhance urban lifestyles and increase business efficiency.
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