Tata Motors stock hits upper circuit after plans to raise $1B for Passenger Electric Vehicle

TPG Rise Climate along with co-investors shall invest Rs7,500cr in compulsory convertible instruments to secure between 11 % to 15 % stake in this company translating to an equity valuation of up to $9.1 bn.

Oct 13, 2021 10:10 IST India Infoline News Service

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Shares of Tata Motors on a winning spree and hit the upper circuit at Rs483.90 on the BSE. The stock hit a 52-week high at Rs499.95 on the BSE. The Tata Group stock has rallied 30% in the four trading sessions.

Tata Motors Ltd (TML) and TPG Rise Climate have entered into a binding agreement whereby TPG Rise Climate along with its co-investor ADQ, shall invest in a subsidiary of Tata Motors that will be newly incorporated.

TPG Rise Climate along with co-investors shall invest Rs7,500cr in compulsory convertible instruments to secure between 11 % to 15 % stake in this company translating to an equity valuation of up to $9.1 bn.

The stock is currently trading at Rs488.25 up by Rs67.45 or 16.03% from its previous closing of Rs420.80 on the BSE. The scrip opened at Rs462.85 and has touched a high and low of Rs499.95 and Rs462.85 respectively.

The new company shall leverage all existing investments and capabilities of Tata Motors Ltd and will channelise the future investments into electric vehicles, dedicated BEV platforms, advanced automotive technologies and catalyse investments in charging infrastructure and battery technologies.

Over the next 5 years, this company will create a portfolio of 10 EVs and in association with Tata Power Ltd, catalyse the creation of a widespread charging infrastructure to facilitate rapid EV adoption in India, Tata Motors said in the filing.

In the filing, the auto company said it is expected that the first round of capital infusion will be completed by March 22 and the entire funds will be infused by end of 2022. Morgan Stanley and JP Morgan are the joint financial advisors to TML, while BofA Securities India Ltd are representing TPG Rise Climate for this transaction. Khaitan & Co are legal advisors to TML, Shardul Amarchand Mangaldas & Co, Cleary Gottlieb are legal advisors to TPG Rise for the transaction. The transaction is subject to conditions precedent and customary approvals.

N Chandrasekaran, Chairman Tata Motors Ltd commented, “I am delighted to have TPG Rise Climate join us in our journey to create a market-shaping electric passenger mobility business in India. We will continue to proactively invest in exciting products that delights customers while meticulously creating a synergistic ecosystem. We are excited and committed to play a leading role in the Government’s vision to have 30% electric vehicles penetration rate by 2030.”

Jim Coulter, Managing Partner TPG Rise Climate and Founding partner of TPG commented, “We are excited to partner with Tata Motors on their mission to lead the electrification of passenger mobility in India. There is significant momentum around India’s EV movement, supported by the Government’s vision and policies, as well as growing consumer demand for greener solutions. The investment aligns with TPG Rise Climate’s focus on decarbonized transport and builds on TPG’s long history in India.”

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