British International Investment (BII), the UK’s development finance institution and impact investor and Mahindra & Mahindra (M&M) have executed a binding agreement to invest up to Rs1,925 crore ($250 million) each into a wholly owned subsidiary of M&M that will be newly incorporated (EV Co.), the firm said in a statement.

 

BII will invest up to ₹1,925 crores in the form of compulsory convertible instruments at a valuation of up to Rs. 70,070 crores, resulting 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 crores / $1 billion between FY 24 and FY 27 for the planned product portfolio. 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.

 

British International Investment to invest $250 million in M&M’s 4 wheeler EV biz at a valuation of $9.1 billion

 

BII’s investment is designed to significantly accelerate the availability and adoption of electric vehicles in India and other markets served by M&M, the company said. The investment alongside M&M in the new EV company supports BII’s undertaking that at least 30% of its total investments will be in climate finance.

 

The EV Co. will significantly leverage the broader manufacturing capabilities, product development, design organizations along with the ecosystem of suppliers, dealers, and financiers of M&M. The funds will be utilized primarily to create and market a world-class electric SUV portfolio with advanced technologies.

 

Both risk appetite and interest rate scenario have turned against the market, said analysts. India Inc is losing appetite for offshore debt.The Nifty Auto index seems to reflect this optimism, appreciating by over 10% so far in CY22, making it the top gainer among NSE’s sectoral indices.Automakers earnings still stuck in the slow lane.

 

Sebi is also discussing raising the cap with the Reserve Bank of India.

 

Anish Shah, MD & CEO, Mahindra & Mahindra Ltd. said: “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."