Singapore's Temasek To Pump In Rs 1,200 Cr Into M&M's EV Arm

Singapore’s sovereign investment firm Temasek will be investing Rs 1,200 crore in Mahindra & Mahindra’s four-wheeler passenger vehicles arm – Mahindra Electric Automobile Ltd, the automaker said in a regulatory filing.

A binding agreement has been executed between M&M and Temasek where the latter will pump in Rs 1,200 crore into Mahindra Electric Automobile Ltd (MEAL), valuing the EV arm at Rs 80,580 crore, the statement added.

Details of the agreement

Temasek will invest the amount in the form of Compulsorily Convertible Preference Shares (CCPS) at a valuation of up to Rs 80,580 crore, resulting in Temasek's ownership in a range of 1.49 per cent to 2.97 per cent in Mahindra Electric.

"Temasek will join British International Investments (BII) as an investor in MEAL. With this investment, Mahindra's EV subsidiary's valuation goes up by 15 per cent from up to Rs 70,070 crore to up to Rs 80,580 crore," the company said.

M&M Managing Director & CEO Anish Shah said, "Globally known for their strong governance, Temasek's investment is a step forward, as we execute our strategy towards future leadership in electric SUVs. The valuation of up to USD 9.8 billion is testimony to Mahindra's EV business and the progress we have made in the journey towards scaling up the electric SUV portfolio."

M&M also acknowledged the global experience of these investors investors -- Temasek and BII, will be valuable for MEAL. The amount invested is consistent with the Mahindra Group's plan to minimise dilution.

M&M to raise money

Mahindra & Mahindra will be exploring multiple tranches over the next two fiscal years, primarily through stake sales in the EV subsidiary, the Mint had reported in March quoting sources. 

Apart from that M&M also announced that it is setting up a Rs 10,000 crore facility in Pune for the manufacture of electric vehicles.

In July, Mahindra and British International Investment (BII), the UK’s development finance institution, signed a binding agreement to invest as much as $250 million each into Mahindra’s EV subsidiary.

Speaking about the announcement, Rajesh Jejurikar, Executive Director, Auto & Farm Sectors, Mahindra & Mahindra Ltd., stated, “We are delighted with this approval from the Govt. of Maharashtra for setting up our EV Manufacturing Plant in Pune, and investing in what has been our ‘home’ state for over 70 years. We are very thankful to the Govt. of Maharashtra for their continued support. The Government’s focus on ‘ease-of-doing-business’ and progressive policies, together with Mahindra’s investment, will act as a catalyst for Maharashtra to become India’s EV hub, attracting further Indian and Foreign Direct Investment.”

(With PTI inputs.)