Mahindra & Mahindra will acquire 38% stake in EPC Industries for Rs 43.35 crore  through preferential allotment of 65.58 lakh shares. M&M got board approval for this investment decision. I am thinking that it is a strategic decision as M&M already have presence in agriculture sector through Pawan Goenka managed Mahindra Shubhlabh Services Ltd.    According to new takeover rules, M&M should announce mandatory open offer to buy another 20% stake in EPC Irrigation. M&M will announce open offer on April 6. Offer price is 66.55 per share(???!!!)   If I were Anand Mahindra/Pawan Goenka?     1. I will change the name of the company from EPC Industries/EPC Irrigation to Mahindra Irrigation Pvt. Limited.   2. This company now has presence in just 12 states. I will use Mahindra network to expand its presence across India (within 2 years).  3. Our competitor Jain Irrigation is now entering into finance sector to provide loans to farmers. But, we already have presence in financing through M&M financial services. I will integrate the operations of both companies to fund farmers - beneficial for both companies.  4. My company sales are now at around 90 crore only while Jain Irrigation sales are around 3,000 crore. Still, they are talking about 30-40% annual growth for next few years. Then my small company should grow at 100-200% for next 4-5 years. We will use our resources, brand image and Mahindra network to reach our target.   5. My brand is already well known among Indian farmers due to Mahindra tractors. We will try to educate those farmers about the benefits of drip irrigation.      6. Our company sales are now at 90 crore. I will set a target of 1,000 crore sales by 2015.   7. My small company still now struggled to take on Jain Irrigation due to lack of money and management bandwidth. I will infuse both.  8. This company went to BIFR in 2007 but was saved by a venture capital fund (40 crore cash infusion by buying equity). Company … [Read more...]