New Delhi: Mahindra & Mahindra, a local manufacturer, announced that it had signed a legally binding agreement with Temasek, a private equity firm located in Singapore, for up to a 2.97% share in its passenger electric vehicle business. The deal is valued at up to $9.8 billion and will cost up to 1200 crore ($145 million). Mahindra’s passenger electric mobility division, MEAL (Mahindra Electric Automobile Limited), was valued at $9.1 billion in its most recent round of funding with British International Investment (BII) last year.
The sale of shares in Mahindra & Mahindra Ltd’s electric vehicles (EV) company in a series of tranches over the course of two to three years would raise $1 to 1.3 billion, according to a March Mint story.
Temasek will invest Rs. 1200 crores in the form of Compulsorily Convertible Preference Shares (‘CCPS’), which will give Temasek a 1.49% to 2.97% shareholding in MEAL at a valuation of up to Rs. 80,580 crores. Temasek will become a shareholder in MEAL alongside British International Investments (BII). With this investment, Mahindra’s EV subsidiary will be valued at up to Rs. 80,580 crores, an increase of 15%. These renowned investors’ extensive international experience will be beneficial to MEAL. According to a press release from M&M, the sum invested is consistent with the Mahindra Group’s goal to reduce dilution.
“With the unveiling of our born EV range based on the INGLO platform in August 2022 in the UK, which is on track for execution, we underlined Mahindra’s aim to develop a coveted worldwide brand. Temasek’s involvement has enhanced our international strategic alliances, and by 2027, we aim to sell 20% to 30% of Mahindra SUVs as electric vehicles, according to Rajesh Jejurikar, Executive Director and CEO of Mahindra & Mahindra’s Auto & Farm Sectors.
By building a new electric vehicle (EV) factory close to Pune and creating platforms for its planned electric sport utility vehicles (SUVs), Mahindra is preparing for a future where sustainable mobility will predominate. Over the next two to three years, the conglomerate projects an investment requirement for its EV business of at least 10,000 crore.
Mahindra and British International Investment (BII), a development financing organization in the UK, struck a legally binding agreement in July of last year to jointly invest up to $250 million in Mahindra’s EV company.
When it comes to the success of its most recent releases, Mahindra has a remarkable track record. Runaway triumphs include the Thar off-roader, which was resurrected as an urban lifestyle vehicle in 2020, the XUV700 in 2021, and the Scorpio-N in 2022. They have attracted young, aspiring consumers looking for features and a big, commanding road presence at affordable costs. In order to steer the transition to electric vehicles while keeping the very essence that makes its SUVs cult favorites, it will now have to reinvent the laws of the SUV market it wants to dominate in an uncharted, silent, and electrified environment.
The first Mahindra Born EV, the XUV.e8, which looks like the IC engine SUV XUV700, will go on sale in the latter part of 2019. Vehicles built on a solely EV basis are known as “born EVs.” M&M will be the first manufacturer in India to create numerous models and brands on a single EV platform, despite rival Tata Motors having an early advantage in the market for electric vehicles. In the new era of the EV world, there will be customers who value heritage and familiarity with the past, but there will also be a new set of customers who want a new brand experience and may not be drawn to Mahindra’s current design language, according to Veejay Nakra, CEO, Automotive Division, Mahindra & Mahindra.
