Tata Motors, a renowned name in the automotive industry, made a significant announcement on October 13. The company revealed its intention to divest a 9.9 percent stake in Tata Technologies Limited (TTL) for a substantial ₹1,614 crore, as confirmed in a regulatory filing.
This strategic move involves Tata Motors entering into share purchase agreements, with TPG Rise Climate leading the investor group. The transaction places an impressive equity valuation of ₹16,300 crore on TTL.
In a statement, Tata Motors Limited (TML) highlighted the specifics of the deal: “Tata Motors Limited (TML) has entered into share purchase agreements to sell a 9.9% stake in Tata Technologies Ltd (TTL) for an aggregate consideration of INR 1,613.7 crore. TPG Rise Climate is the lead investor for this transaction, which ascribes an equity valuation of INR 16,300 Crore (approximately US$2.0 billion) to TTL,”
The transaction is expected to conclude on October 27, 2023, unless mutually extended by the involved parties, as mentioned in the press release.
The sale will result in Tata Motors Limited receiving ₹1,467 crore as consideration for divesting a 9.0 percent stake in TTL to TPG Rise Climate SF Pte. Ltd, a private equity fund with a strong focus on climate-related investments. Additionally, ₹146.7 crore will be acquired by Tata Motors for the sale of a 0.9 percent stake in TTL to the Ratan Tata Endowment Foundation.
It’s worth noting that TPG Rise Climate serves as the dedicated climate investing arm of TPG, a global impact investing platform managing $18 billion. This fund specializes in five critical climate sub-sectors, encompassing energy transition, green mobility, sustainable fuels, sustainable molecules, and carbon solutions.
Tata Motors expressed that this transaction aligns with its broader objective of de-leveraging and anticipates the completion of customary closing procedures within the next two weeks.
This development builds on the existing partnership between Tata Motors and TPG Rise Climate, which earlier saw a substantial $1.0 billion investment in Tata Passenger Electric Mobility Limited. Together, they aim to revolutionize the electric passenger mobility landscape in India, creating a market-shaping presence in the industry.
About Tata Motors:
Tata Motors Limited, headquartered in Mumbai, is a multinational automotive company and a key subsidiary of the Tata Group. The company specializes in manufacturing a wide range of vehicles, including cars, trucks, vans, and buses. Tata Motors also has prominent subsidiaries such as British luxury automaker Jaguar Land Rover and South Korean commercial vehicle manufacturer Tata Daewoo.
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