Auto and farm equipment major Mahindra & Mahindra is planning to sell shares in Mahindra Holidays & Resorts India before its initial public offering.
The IPO of Mahindra Holidays, the tourism arm of the company, is likely to take place in the second half of this financial year.
M&M has an option to place 15-49 per cent of the group companies with private financial institutions, said sources close to the company.
The Mahindra Holidays IPO will be followed by that of the group's IT arm Tech Mahindra. Sources indicated that the group would resort to private equity placement prior to listing in this company as well.
However, Bharat Doshi, executive director, M&M declined to comment. "We will take appropriate decision at an appropriate time," he said.
Mahindra Holidays is planning to raise about Rs 50-100 crore (Rs 500 million and 1 billion) through private placements. Another Rs 100 crore (Rs 1 billion) is expected to be raised from the IPO, it is learnt.
"The proceeds from the private placements and the IPO will be primarily be utilised for acquisitions in US, Middle East and South East Asia," said sources.
Mahindra Holidays recently set up a marketing office in US called Mahindra Holidays US. It has also set up representative offices in UAE and Kuwait in the West Asia.
Tech Mahindra has plans to raise cash to fund expansion in US, UK and Australia.
M&M on Tuesday informed the BSE that it would sell up to 5.32 per cent stake in Tech Mahindra, a subsidiary of the Company, through IPO.
Recently, the company's board cleared spending of up to $300 million on overseas acquisitions. This month, Tech Mahindra set up its Noida development centre employing 2,000 people at an investment of Rs 100 crore (Rs 1 billion).
The Noida centre is the sixth development hub for the company after Chennai, Bangalore, Mumbai, Pune and Kolkata.