M&M hits record high as UKs BII to invest up to Rs 1,925 cr in new EV arm

8 Jul 2022 , 11:42 AM

BII, the UKs Development Finance Institution and impact investor and M&M executed a binding agreement to invest up to Rs 1,925 crore each into a wholly owned subsidiary of M&M that will be newly incorporated. BII is the new name for the UKs Development Finance Institution and was formerly known as CDC Group. BII is a trusted investment partner to businesses in Africa, Asia and the Caribbean. BII plays a key role in the UK Governments wider plans to mobilize up to GBP 8 billion a year of public and private sector investment in international projects by 2025. The company has investments in over 1,300 businesses in emerging economies and total assets of GBP 7.7 billion. As per the regulatory filing, BII to invest up to Rs 1,925 crore in the form of compulsory convertible instruments at a valuation of up to Rs 70,070 crore. This will result in 2.75% to 4.76% ownership for BII in the EV Co. The EV Co. will focus on four-wheel (4W) passenger electric vehicles. The total capital infusion for the EV Co. is envisaged to be approximately Rs 8,000 crore / $1 billion between FY24 and FY27 for the planned product portfolio, the company said. M&M and BII will work jointly to bring other like-minded investors in the EV Co. to match the funding requirement in a phased manner. BIIs investment is designed to significantly accelerate the availability and adoption of electric vehicles in India and other markets served by M&M. The EV Co. will significantly leverage the manufacturing capabilities and product development of the company as also the ecosystem of suppliers, dealers and financiers of the company. The funds infused by the company and BII will be utilized by the EV Co. primarily to create and market a world-class Electric SUV portfolio with advanced technologies. The investment alongside M&M in the new EV company supports BIIs undertaking that at least 30% of its total investments will be in climate finance. It is expected that the first round of BIIs capital investment will be completed not later than June 2023 on fulfilment of conditions precedent and the balance post completion of certain milestones in FY24. Rajesh Jejurikar, executive director – Auto & Farm Sectors, M&M, said, Mahindra has very exciting plans to be a leader in the electric SUV space. We would share our vision that includes our comprehensive product, technology, and platform strategy at the UK event on 15 August 2022, followed by a reveal of the electric XUV 400 in September 2022. We would expect between 20% to 30% of Mahindra SUVs being electric by 2027. Dr. Anish Shah, MD & CEO of M&M said, 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. The Mahindra Group aims to be Planet Positive by 2040. Mahindra has been a pioneer in the electric vehicles space, and we are confident we will be the leaders in the electric SUV market in the future. Nick ODonohoe, CEO of British International Investment, commented, BIIs 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. M&M enjoys a leadership position in farm equipment and utility vehicles in India and is the worlds largest tractor company by volume. It offers a wide range of products and solutions ranging from SUVs, pickups, commercial vehicles, and tractors, to electric vehicles, two-wheelers, and construction equipment. On a consolidated basis, M&Ms net profit (continuing operations) surged 48% to Rs 2,237 crore on a 21% increase in revenue to Rs 25,934 crore in Q4 FY22 over Q4 FY21. Shares of M&M hit an all time high of Rs 1,191.90 today. Powered by Capital Market – Live News