After rounds of news reports on M&M interested in buying Reva the UV major has recently confirmed the fact that the company has picked up a stake in the company. With the electric vehicle (EV) market well slated to touch 5,00,000 units by the year 2012 and 1.5-2 million units by 2020, analysts are of a view that M&M's Reva buy is surely going to prove a good bet for the company in the long-run.

While there is no denying that Reva hasn't been able to make its mark in the past 10 years but one can be certain that electric cars surely have a bright future in the Indian market and M&M's investment is surely going to reap the tractor maker rich dividends in time to come.

In fact, Reva's strong R&D will help M&M to gain an edge over its counterparts in the light CV segment. Moreover, according to the analysts familiar with the matter, the increasing complexity of the corporate structure may potentially attract a higher conglomerate discount for M&M in the long run which will eventually lead to a compression in valuation multiples.