The demerger plan of Tata Motors that will create separate passenger vehicles and commercial vehicles entities will retain flexibilities for the exit route of investors in auto company’s electric vehicles business, Group CFO P B Balaji said in a media interaction on June 26 in Mumbai.
As part of the demerger, the separate passenger vehicle entity that will be created will house the electric vehicles subsidiary Tata Passenger Electric Mobility Ltd and the Jaguar Land Rover business.
In October 2021, TPG Rise Climate and its co-investor ADQ announced an investment of Rs 7,500 crore in the EV business at a valuation of up to $9.1 billion.
Various media reports in the past have indicated different plans for the exit route that may be offered to the investors, including an IPO of the EV business.
Speaking with the media, Balaji said that there are various options for the investors. However, he added that any concrete conversation about an exit will happen when the time is right.
“Giving them an exit where the topco (PV business) is the exit is a very much a possibility but what will be the exact route also depends on when they also want to exit because they see value in the business. So it's a conversation that needs to be had at the right time. But flexibilities are being retained in any case so that they continue to have all the options in front of them,” said Balaji.
Talking about the performance of the company’s different business units, Balaji added that he's confident that Jaguar Land Rover will go debt-free next year and that the company's focus is on pivot to luxury. The consolidated domestic auto business is already debt free, he said, however, the standalone commercial vehicles business has a debt of around Rs 6,000 crore, he added.
Commenting on Tata Motors' commercial vehicles business, Executive Director Girish Wagh said, “Our focus in trucks and buses is to maintain product superiority, include multi-fuel options. Focus on value selling. Increase the penetration of value added services.”
Highlighting the automaker’s focus on emerging opportunities, he said that this year the commercial vehicles business will be investing 40 percent of its capex spends on futuristic mega trends.
Meanwhile, Tata Motors Electric Mobility head Shailesh Chandra said that he expects the Indian auto industry would touch six million units by FY30.
“Growth will be driven by rising disposable income, rising share of upgraders and additional car buyers,” he said.
Chandra said that Tata Motors is targeting a market share of 18-20 percent in the Indian EV market by FY30.
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