The deal
Mahindra and Mahindra has raised $145 million from Temasek for its electric vehicle unit. Temasek Holdings Pvt Ltd (Temasek) is an investment company.
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The binding agreement is for Temasek to invest in MEAL (Mahindra Electric Automobile Limited), the four-wheeler (4W) passenger electric vehicle company.
Temasek will invest in the form of Compulsorily Convertible Preference Shares (‘CCPS’) at a valuation of up to INR 80,580 crore, resulting in Temasek’s ownership of a 1.49% to 2.97% stake in MEAL.
Temasek will join British International Investments (BII) as an investor in MEAL. With this investment, Mahindra’s EV subsidiary’s valuation goes up by 15% to 805.8 billion rupees ($9.8 billion).
Why it matters
Mahindra is aggressively trying to lift the share of its electric SUVs in a market that is dominated by larger rival Tata Motors, as the government pushes to grow EV sales to 30% by 2030 from less than 2% today.
Mahindra said it expects electric models to make up between 20% and 30% of its total SUV sales by March 2030 – pushing back an outlook it gave last year of meeting that target by 2027.
“Temasek’s investment is a step forward, as we execute our strategy towards future leadership in electric SUVs,” Mahindra CEO Anish Shah said.
In 2022, Mahindra unveiled its INGLO EV platform and five future e-SUVs.
India’s EV market is small but growing, attracting interest from global players including Tesla.
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