Of this, Mahindra has agreed to invest Rs 525 crore by way of subscription to CCPS (compulsorily convertible preference shares) and equity in one or more tranches.
An additional Rs 350 crore will be invested by Classic Legends’ existing shareholders and new investors in the motorcycling making firm in one or more tranches.
After the fresh fund infusion – which is likely to complete by March 15, 2025 – Mahindra will continue to hold 60% stake in Classic Legends and the latter will continue to be its subsidiary. Classic Legends was incorporated in 2015.
The latest round of fund infusion comes against the backdrop of Classic Legends’ plans to invest ₹1,000 crore till FY26 as it seeks to play catch-up in the middle weight, lifestyle motorcycle market in India and tap burgeoning demand for such models in overseas markets.
The investment will be utilised towards tooling up new products, marketing, creating distribution networks for international markets, and new product development, among others, Anupam Thareja, cofounder of Classic Legends, had told ET in September. This amount, he had mentioned, would be deployed from a combination of internal accruals, existing shareholders, and external investors.The investment would help the firm eliminate the losses incurred over the past three years and turn profitable in the current financial year, he had said.Classic Legends had turned profitable in its first full year of operations in FY20 before plunging into losses amid business challenges. For the year ended March 2023, Classic Legends had a turnover of Rs 709.74 crore against Rs 594.99 crore in the previous year.