Mahindra & Mahindra on Thursday declared raising Rs 19.25 billion from the British International Investment (BII) into a new 4-wheel Passenger EV firm to be set up by the company. As per the terms of the agreement between M&M and BII, the newly formed EV subsidiary will receive a capital infusion of Rs 19.25 billion (or $250 million) from each of the two entities, in two tranches, at a valuation of Rs 700.7 billion ($9.1 billion). For its investment, BII, which is UK’s Development Finance Institution, will receive 2.75-4.76 per cent ownership of the EV company.
According to a regulatory filing by Mahindra & Mahindra, the EV company is expected to receive a total capital infusion between FY24 and FY27 that will amount to roughly Rs 80 billion for the planned product portfolio. In order to gradually meet the EV company’s future financing needs, M&M and BII will team together later to recruit more like-minded investors. The first round of BII’s capital investment is expected to be completed by June 2023, subject to the fulfilment of certain preconditions, and will be followed by a second round of funds after the completion of the performance-based assessment in FY24.
“We are extremely delighted to have BII as a partner in our SUV electric journey. In BII, we have found a like-minded long-term partner who is committed to combating the climate emergency,” M&M Managing Director & Chief Executive Officer, Dr Anish Shah said while commenting on the development. He continued by outlining the goals of the Mahindra group, which is aiming to be planet-positive by 2040.
“BII’s anchor investment will be key to attracting additional sources of private capital into this exciting venture with the Mahindra Group. The acceleration of EV development in India will be critical to supporting the country in reaching its emission targets as well as improving air quality in many urban areas. Mahindra will play a central role in the decarbonisation of the automotive industry in India and elsewhere,” said Nick O’Donohoe, CEO of British International Investment, on the investment.
Meanwhile, shares of Mahindra & Mahindra hit their all-time high today after the announcement of the news. The large-cap stock hit an all-time high of Rs 1,191.90, rising 5.17 per cent against the previous close of Rs 1,133.35 on BSE.
