Mahindra & Mahindra Limited has informed that IFC is investing Rs 600 crore in the company’s newly incorporated subsidiary, which aims to promote the use of affordable electric three-wheelers and small commercial vehicles for last-mile mobility in India.
This move is expected to bring significant benefits to microentrepreneurs in India by increasing their income, while also contributing to the transition of the auto industry from fossil fuel to EVs. This funding is likely to be a game changer in the Indian mobility sector, said the company in its media release.
IFC’s investment of Rs 600 crore in NewCo, a wholly owned subsidiary of Mahindra & Mahindra, is a significant move as it marks its first investment in an EV manufacturer in India and the world’s first investment in electric three-wheelers.
The investment will take the form of compulsory convertible instruments, with a valuation of up to Rs 6,020 crore. As a result, IFC will have a stake of 9.97% to 13.64% in NewCo.
The last mile mobility division will be housed at NewCo, which will include three-wheelers (Alfa, Treo, Zor) and four-wheeler SCVs (Jeeto).
The IFC financing will aid in the expansion of electric mobility in the last mile connectivity – passenger and cargo segments – while also enabling the development and manufacturing of next-generation products in this space.
The use of electric vehicles allows for a smooth and noise-free operation, while also resulting in higher earnings for drivers and creating opportunities for micro-entrepreneurship.
Additionally, the business is expected to create job opportunities for women, contributing to equality and inclusion, while also supporting India’s climate action goals.
The legal advisors for the transaction are Khaitan & Co. for Mahindra & Mahindra and Cyril Amarchand Mangaldas for IFC.
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