Tata Motors (TML) and TPG Rise Climate have entered into a binding agreement whereby TPG Rise Climate along with its co-investor ADQ, will invest in a subsidiary of Tata Motors which will be newly incorporated.
TPG Rise Climate along with co-investors will invest INR7,500 crore in compulsory convertible instruments to secure between an 11% to 15% stake in this company translating to an equity valuation of up to $9.1 bn.
The new company will leverage all existing investments and capability of Tata Motors and will channel future investments into electric vehicles, dedicated BEV platforms, advanced automotive technology and aid investments in charging infrastructure and battery technologies.
Over the next five years, this company will create a range of 10 EVs and, in association with Tata Power, assist with the creation of a widespread charging infrastructure to facilitate rapid EV adoption in India.
It is expected that the first round of capital infusion will be completed by 22 March and the entire funding will be in place by the end of 2022.
The transaction is subject to the usual conditions and regulatory approvals.