Auto major Mahindra & Mahindra (M&M) is in “advanced talks with global investors” to sell its electric vehicle (EV) unit and raise $1-1.3 billion, Mint reported citing sources. Mahindra will raise funds through multiple rounds of sale of stake in its new EV arm, the sources added.
Money raised from these activities will be used for M&M’s new EV Company with British International Investment (BII) over the next three to five years, the report added. The company estimates Rs 10,000 crore investment in the EV business over the next two to three years.
Moneycontrol could not independently verify the report.
One source noted that the Mahindra Group is also “engaged” with large global private equity (PE), ESG-focused funds, and sovereign funds for long-term investment in its EV business.
In February, the automaker informed the exchanges that it has signed a deal with BII for Rs 1,925 crore ($250 million) in a new four-wheeler passenger EV company to be set up by M&M. BII is the UK government’s development finance institution.
Capital in tranches
The investment is valued at Rs 70,070 crore ($9.1 billion) and will be completed in two tranches in cash. The first tranche will be of up to Rs 1,200 crore and the second will be for Rs 725 crore, subject to the achievement of certain milestones agreed upon between the companies.
The partnership will “accelerate growth of the four-wheel passenger EV business and get growth capital to fund the business” and “significantly leverage manufacturing capabilities and product development of M&M and ecosystem of suppliers, dealers and financiers,” M&M had said.
Business expansion
“We are open to raising funds for our electric SUV business from like-minded investors, who espouse similar values and share our vision. We will bring in external investment only if we find like-minded investors. We have not engaged any investment bankers at this stage," Rajesh Jejurikar, executive director and chief executive of (the auto and farm sector) of M&M told Mint.
He noted that plans are “progressing very well” and the company is set to launch five new e-SUVs under the XUV brand and another all-electric brand ‘BE’.
