New Delhi/Hong Kong:
Automaker Mahindra & Mahindra is in talks with global investors between $250 million and $500 million to accelerate its plans to manufacture electric vehicles (EVs), a source with direct knowledge of the matter told Reuters.
Mahindra is in early talks with global green funds and private equity firms, the person said, adding that it wants a long-term investor who can help build its EV business.
While some investors have shown interest in participating in the nearly $800 million funding round in recent months, two banking industry sources said they have held talks with the company about such proposals.
While Mahindra is not actively looking to raise more than $250-$500 million, it is not closed to the idea of increasing the deal size depending on the terms and valuations, the first source said.
“Mahindra wants to bring a benchmark investor along with it, but does not want to dilute a major stake at present,” he said, adding that these plans are in an early stage and subject to change.
Mahindra’s new EV unit, for which it is raising funds, was valued at $9.1 billion in July, marking the first time $250 million was raised from British International Investment (BII).
It was not immediately clear what valuation investors were offering or what the company was seeking for the fresh round.
Mahindra told Reuters in a statement that it has committed to invest $500 million in the electric SUV space with BII, and the two companies will work together to bring other “like-minded, climate-focused investors” into the EV unit. Will work
The talks come weeks after Mahindra outlined an ambitious plan to launch five electric SUVs over the next few years and is targeting such models to make up 30% of its total annual SUV sales by March 2027. The carmaker is expected to be the first electric SUV available. For sale in January.
The fund will help the automaker build a battle chest to compete against rival Tata Motors, which dominates India’s nascent electric car market.
Tata last year raised $1 billion for its EV unit from TPG’s Rise Climate Fund at a valuation of $9.1 billion, making it the first major clean mobility deal in India.
In India, the world’s fourth largest car market, electric models account for just 1% of total annual car sales of around 3 million units. The government wants to increase this to 30% by 2030 and is offering billions of dollars in incentives to companies to manufacture EVs and their components locally.
Mahindra has partnered with Germany’s Volkswagen to procure components such as an electric drivetrain and battery for its electric SUV, and the two are exploring joint vehicle projects, locally manufacturing battery cells and charging solutions. are developing.
The automaker has said it is open to making some investments in the battery cell maker to secure future supply, and is also evaluating the need to set up manufacturing capacity for EVs, according to local media reports.
One of the two banking sources said Mahindra’s funding comes at a time when investor interest in India’s clean mobility transition is rising, resulting in “more money chasing certain assets”.
A third banking source said some existing investor interest has been eroded by Mahindra’s earlier fundraising.