Mahindra To Buy Stake In Electric Car Firm -Source

India's leading utility vehicle maker, Mahindra & Mahindra is set to announce on Wednesday it is buying a share of an electric car company, a source with direct knowledge of the matter Wednesday.

Mahindra is also India's largest tractor manufacturer will make an announcement at 11:45 am in the southern city of Bangalore, where Reva Electric Car Company is headquartered, he said.

Details of the transaction were not immediately available.

Mahindra shares, valued at 6.4 billion U.S. dollars, was up 2.6 percent at 529.70 rupees by 0410 GMT after falling 4.4 percent in the last two trading days sessions. Main Index. BSESN was up 1.3 percent.

The shares have fallen about 2 percent this year, while major index is down nearly 7 percent.

An agreement will mark Mahindra's entry into the electric vehicles segment, and push it one step closer to a complete car car manufacturer.

"Mahindra wants to consolidate its position as a company that wants to produce everything on wheels," said Arun Kejriwal, director of KRIS Research. "This acquisition will go a long way in achieving that goal."

Last year, Mahindra launched a series of scooters and later made a foray into commercial vehicles with lots Maxximo.

It is also planned to launch pick up trucks in the U.S. at the end of this year. [ID: nSGE64I0DF]

"Mahindra can lift the Reva technology to bring out more products," Kejriwal said.

Reva, founded by technocrats crater Chetan Maini in 1994, is an Indo-American joint venture with California's Damn LLC, and has launched more than 3000 cars. Maini's deputy leader and technical manager.

The cars are priced between 300,000 and 360,000 rupees ($ 6,329 - $ 7,595) in India, and most run in Bangalore and London.

It struck a deal last year with India by General Motors [GM.UL] to develop electric cars and work has started on an electric version of Chverolet Spark, which is scheduled to hit the roads in October.

This year's budget, the Indian government gave a boost to the electric vehicle industry by eliminating tariffs on the import of critical components used in these cars.