Amidst Diplomatic Row, Mahindra's Canada-Based Associate Firm Wraps Up Its Investment

As the ties between India and Canada plunged to their lowest in recent memory, the Canada-based associate firm of Indian auto giant Mahindra & Mahindra, Resson Aerospace Corporation, is mulling to wrap up its investment in the Indian automaker. In an exchange filing on September 21, M&M said, "Resson Aerospace Corporation, Canada, which is an Associate of the Company ('Resson') wherein the Company holds 11.18% stake (on a fully diluted basis) through Class C preferred Shares, had filed for a voluntary winding-up."

The company said that Resson has received a Certificate of Dissolution from Corporations Canada dated September 20, 2023. Consequent to the above, Resson has ceased to be in existence and has also ceased to be an Associate of the Company under the Indian Accounting Standards (IndAS) with effect from 20th September 2023.

Today, the share price of Mahindra & Mahindra Ltd. was spotted trading 1.22% higher at Rs 1603.15 per share at 11:49 am IST.

The bilateral relations between the two countries became tense after Canadian Prime Minister Justin Trudeau alleged that there is a 'potential link' between Indian government agents and the killing of pro-Khalistan terrorist Hardeep Singh Nijjar.

The tension between the two countries has escalated so much that India on Thursday announced temporarily suspending the issuance of visas to Canadian citizens in view of "security threats" faced by its high commission and consulates in Canada.

Meanwhile, on Thursday the shares of several companies including Indus Towers, Nykaa, Zomato, Paytm, and Delhivery owned by Canada Pension Fund (CPF) traded in the red.

Canada Pension Plan Investment Board (CPPIB), which invests money from the Canada Pension Plan (CPP) to generate returns, has made a series of investments in Indian companies. These companies include Acko, Zomato, Kotak Mahindra Bank, ICICI Bank, Infosys, Wipro, and several others. The Canadian fund owned 4.38 crore Delhivery shares, aggregating to 6% shareholding in the company. Delhivery share price was down 0.17% at Rs 429.70.

Additionally, CPPIB owns a 2.18% stake in Indus Towers, a 1.76% stake in One 97 Communications, and a stake of 1.47% in FSN E-Commerce Ventures.

Canada Pension Plan Investment Board is Canada's largest pension and has significant holdings in some of the Indian companies. CPPIB reported an investment of $21 billion in India almost a year ago.

CPPIB also holds over 20.35 crore equity shares or 2.37% stake in Zomato as of June 2023. Zomato shares were trading 0.75% lower at Rs 99.21.