Mahindra Logistics, the third-party logistics business of the Mahindra Group, acquired shared-mobility brand Meru Travel Solutions (MTSPL) and its subsidiaries in a Rs 50.5-crore deal.

“MTSPL is the holding entity and through its subsidiaries operates in (the) ride-hail segment and corporate transportation solutions space,” Mahindra Logistics informed stock exchanges on November 9.

On the face of it, Mahindra Logistics, which generated Rs 3,263.7 crore in revenue in fiscal year (FY) 2021, has bought out Meru, which clocked revenue of Rs 44.3 crore in FY 2021.

Mahindra Logistics is part of the newly-created ‘mobility services’ of the Mahindra Group. But, it is essential to understand the enterprise-mobility business of Mahindra Logistics, which contributes less than 4 percent to its revenue — and has rolled out a platform called ‘Alyte’.

“The acquisition complements our mobility-services portfolio with an expansion in airport ride-hailing and on-call services,” said Rampraveen Swaminathan, CEO of Mahindra Logistics, in a press statement.

“The combined capabilities of Meru and Alyte will enable us to better serve our B2C and enterprise customers with an expanded portfolio of services delivering on a promise of safety, customer excellence and sustainability,” Swaminathan said, adding that Mahindra Logistics is eyeing synergies in supply, technology management, and electric mobility.

The COVID-19 pandemic has hurt the enterprise-mobility business of Mahindra Logistics and Meru in equal measure, as offices were shut and travel got restricted because of lockdowns during the first two waves.

Meru’s revenue plunged 34 percent on a compounded basis from the high of Rs 155.7 crore in FY 2019.

Meanwhile, the enterprise mobility solutions business of Mahindra Logistics was Rs 385.5 crore, or 10 percent of its revenue, in FY 2019. This shrank by 32 percent to Rs 119 crore in FY 2021 (or, 3.65 percent of Mahindra Logistics’ revenue).

The Mahindra subsidiary needs to expand this business, even as its core supply-chain management business declined by 3 percent in three years to Rs 3,145.6 crore on a compounded basis. Mahindra Logistics serves more than 400 corporate customers in industries like automobile, engineering, consumer goods, and e-commerce.

With Alyte, it wants to create a “multi-tenancy, multi-offering platform for all corporate mobility needs,” according to its 2020-21 annual report.

Alyte will have a combination of cars in its fleet that are powered by both ICE (internal combustion engine) and batteries (electric vehicles).

“Our long-term goal is to have 30 percent of our total fleet as EVs. We plan to establish an EV supply model and ecosystem by means of partnerships with OEMs, financing parties, vehicle maintenance and off-road support players, and charging infrastructure providers,” its latest annual report states.

Meru has a significant presence in the airport ride-hailing segment and provides on-call and employee mobility services to corporates in India. It also has more than 200 electric vehicles in its fleet.

As a digital platform, Alyte will use analytics for centralised orchestration and asset utilisation, Mahindra Logistics added. It will support modules for contracting, invoicing, and providing network visibility and optimisation.

“We are building B2B2C subscription-based services for daily office commute, wherein the end-user can self-book, roster and schedule a ride between workplace and home,” according to the latest Mahindra Logistics annual report. In FY 2021, Mahindra Logistics upgraded its transportation management system.

But for both Mahindra Logistics’ enterprise mobility business and Meru, getting technology talent will be critical, as the company seeks to raise capital.