Mahindra & Mahindra To Raise $1.3 Billion To Fuel Up Its EV Venture: Report

British International Investment and Mahindra in July signed a binding agreement to invest as much as $250 million each into Mahindra’s EV subsidiary.

New Delhi: Auto major Mahindra & Mahindra Ltd is in advanced talks with global investors to raise $1-1.3 billion by selling shares in its electric vehicles (EV) unit, the Mint report quoting people familiar with the development, adding the move is aimed at accelerating the expansion plans of its newly formed subsidiary, EV Co.

The company is likely to raise capital in multiple tranches over the next two fiscal years, primarily through stake sales in the EV subsidiary, which is currently valued at over $9.1 billion, the report added.

In December, Mahindra said that it’d invest Rs 100 billion to set up an EV manufacturing plant near Pune.

British International Investment and Mahindra in July signed a binding agreement to invest as much as $250 million each into Mahindra’s EV subsidiary.

“We are open to raising funds for our electric SUV business from like-minded investors, who espouse similar values and share our vision of bringing authentic and world-class vehicles to our consumers globally,” said Rajesh Jejurikar, executive director and chief executive of (the auto and farm sector) of M&M in response to a Mint query on the fundraising plan.

“We will bring in external investment only if we find like-minded investors. We have not engaged any investment bankers at this stage,” Jejurikar added.

As per the sources mentioned in the report, the company may raise as much as $800 million to $1 billion in the first tranche of fundraising as early as the first half of FY2024. They’ve said that the funds being planned to be raised will likely be deployed into the EV business over the next three to five years.

“For raising the capital, Mahindra group has engaged in discussions with large global private equity firms, sovereign funds, ESG-focused funds and entities which own and allocate funds on green and renewable energy businesses across the globe,” said one of the two sources quoted by Mint, adding the group prefers long-term investors who can assist in shaping the conglomerate’s EV business and compete with Tata Motors.

“As you are aware, we already have marquee investors, including British International Investment (BII) and have announced investments of Rs 10,000 crore for EVs in Maharashtra. We are progressing very well on our stated plans, which include launching five new e-SUVs under the iconic brand – XUV …and the all-new electric-only brand called ‘BE,” Jejurikar told Mint adding that BII will not participate in the fresh fundraise rounds.

“First of these e-SUVs will be launched towards the end of 2024. The Born EVs will be based on our in-house developed state-of-the-art INGLO EV Platform. We have also recently launched our first electric SUV—XUV400, which registered 15,000 bookings in 13 days, becoming the fastest booked electric SUV in India”, he added.