Mahindra & Mahindra Plans To Raise Rs 5,000 Crore From Global Investors For Its EV Arm: Report

Mahindra & Mahindra, India's largest sports utility vehicle maker by revenue, is currently in advanced discussions with British International Investment (BII) and other global investors to secure up to Rs 5,000 crore ($605 million) for its electric vehicles (EV) unit.

If the ongoing discussions regarding Mahindra Electric Automobile are successful, it will mark the second investment made by the British development financier in the Indian conglomerate.

The valuation of the deal is expected to be 10-15 per cent higher than the previous funding round, which valued Mahindra's EV subsidiary at Rs 70,070 crore ($9.1 billion), Economic Times reported quoting sources.

In July 2022, BII had agreed to invest Rs 1,925 crore ($250 million) in Mahindra Electric through compulsory convertible preference shares, which would result in a stake of 2.75-4.76 per cent, depending upon milestones achieved.

Mahindra was also planning to invest a similar amount in the electric vehicles subsidiary through equity.

"Even though we have not appointed a banker to commence fundraising, our EV business continues to attract interest from investors," a Mahindra spokesperson was quoted by ET as saying in an emailed response.

According to the Mahindra spokesperson, the company's strategy has consistently involved raising a small amount of funds to reduce dilution.

The second round of fundraising by Mahindra for its EV unit comes amid intensifying local competition.

In its disclosure to stock exchanges earlier, Mahindra had revealed plans to invest around Rs 10,000 crore in its EV subsidiaries between FY22 and FY27.

Of this amount, Rs 4,000 crore will be allocated for investment between FY22 and FY24, with the remaining funds to be invested by FY27.

Mahindra has announced plans to introduce five new electric vehicle (EV) models in the market in the coming few years.

The company aims to achieve a 20-30 per cent penetration of e-SUVs in its overall SUV portfolio, which would translate to around 200,000 units in volume.

As of May, Mahindra & Mahindra (M&M) has already dispatched 3,690 units of the XUV 400, an e-SUV that was launched in January. This figure represents around 2.2 per cent of the total passenger vehicles sold during the period.