Mahindra & Mahindra or M&M, on Thursday said that it is planning to divest up to 8.09% of its equity capital in its travel company Mahindra Holidays & Resorts India Limited (MHRIL) through the open market. This is to comply with the statutory requirement for listed companies to reach a minimum threshold of 25% public within a period of three years from the date of commencement of the Securities Contracts (Regulation) (Amendment) Rules, 2010. For the company, this period is by June, 2013, it said in a statement. 

The company said the divestment will be done in various tranches and will be completed before June 2013. The first tranche, it said, will happen in the near term. M&M currently holds 83.09% of the equity share capital of MHRIL. Shares of MHRIL closed at R333.25, up 4.73% on the BSE on Thursday.

Uday Phadke, president, finance and legal, M&M, said, “We plan to divest a total 8.09% of MHRIL’s equity share capital in small lots over the course of the next 16 months through the market. In addition to meeting the statutory requirement, this sale will significantly improve the float of MHRIL shares in the market.”

For the quarter ended June 30, 2011, MHRIL reported a net profit of Rs. 16.89 crore as against Rs. 13.29 crore in the corresponding period last year, a growth of 27%. Total income of the company for the June quarter stood at Rs.126.04 crore as compared to Rs. 101.77 crore.