Mahindra & Mahindra is in discussions with British International and others for a Rs 5,000 crore EV push

10 Jul 2023 , 12:32 PM

According to news reports, Mahindra & Mahindra, the largest manufacturer of sports utility vehicles in India by revenue, is in advanced talks to fund up to Rs 5,000 crore ($605 million) for its electric vehicle (EV) arm from British International Investment (BII) and other foreign investors.

The British development financier would make its second round investment in the Indian business if the talks on Mahindra Electric Automobile do result in a good conclusion.

According to one of the reports, the deal valuation is likely to be around 10–15% higher than the previous round of funding, which valued Mahindra’s EV business at Rs 70,070 crore ($9.1 billion).

Mahindra Electric and BII had previously agreed to a $250 million investment in July 2022 through mandatory convertible preference shares, which would result in a stake of 2.75-4.76%, depending on milestones reached.

Mahindra agreed to make a similar equity investment in the subsidiary for electric vehicles.

Mahindra’s second fundraising effort for its EV division coincides with an increase in local rivalry. To meet strict decarbonization goals, auto companies in India are looking for outside finance to speed up product introductions and scale up EV segment capacities.

According to Mahindra, its EV businesses will need to invest close to Rs 10,000 crore in capital between FY22 and FY27, the firm disclosed in its routine filings to stock exchanges. Rs 4,000 crore of this would be invested between FY22 and FY24, and the remaining amount will be until FY27.

Between April and October 2025, Mahindra intends to introduce five new EV cars. The automaker anticipates that e-SUV penetration will reach 20–30% of its whole SUV lineup, or volumes of about 200,000 units.

M&M has shipped 3,690 units of the XUV 400, an electric SUV introduced in January, as of May. Nearly 2.2% of all passenger vehicles sold during the time period were represented by this.

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