The electric vehicle market, which recorded a spate of investments over the last few months, saw Mahindra and Mahindra announce the incorporation of an electric vehicle subsidiary ‘EVCo’ in collaboration with British International Invest Plc (BII).
BII, a Development Finance Institution of the UK government, and Mahindra & Mahindra will each invest Rs 1,925 crore in two tranches, the company said in its intimation to shareholders.
The first tranche would see an investment of Rs 1,200 crore, followed by another Rs 750 crore in the subsidiary, which will be a wholly owned wing of Mahindra and Mahindra Ltd.
Mahindra and Mahindra’s four-wheeler electric vehicles segment will be transferred to the subsidiary, which will focus on the electric SUV segment, the company said. BII will have a shareholding in the range of 2.75 and 4.76 percent in the newly incorporated company.
With this funding, Mahindra & Mahindra joins a range of Indian automobile companies that have raised money in order to expand their electric footprint in the growing sector.
Tata Motors set the stage when the company announced last year a fundraise of Rs 7,500 crore from climate-focused private equity fund TPG Rise. The investment took the valuation of the company to $9.1 billion, the highest for an Indian EV company.
Maruti Suzuki, India’s largest player in the passenger vehicle segment, committed Rs 10,440 crore earlier this year, for an EV battery manufacturing plant and vehicle recycling unit in Gujarat.
Ather Energy, an electric scooter maker, raised $128 million from India's sovereign wealth fund National Investment and Infrastructure Fund Limited's (NIIFL) Strategic Opportunities Fund (SOF) and Hero MotoCorp, one of the top players in the traditional two-wheeler segment.
TVS Motor Co, another major player in the two-wheelers space, has also reportedly started the process of a $ 300-350 million fundraise for its electric mobility business.
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