Temasek to invest Rs.1200 Cr in Mahindra Electric, acquiring 3% stake

Temasek to invest Rs.1200 Cr in Mahindra Electric, acquiring 3% stake

Temasek to invest Rs.1200 Cr in Mahindra Electric

In a significant move, Mahindra & Mahindra Ltd. (M&M) has secured a substantial investment of ₹1,200 crore in its electric vehicle subsidiary, Mahindra Electric Automobile Ltd (MAEL), from the renowned global investment firm, Temasek. The binding agreement between the Indian auto major and Singapore-based Temasek paves the way for a 3% stake acquisition in the four-wheeler passenger electric vehicles company.

Temasek Holdings will deploy the funds through Compulsorily Convertible Preference Shares (CCPS) at an impressive valuation of up to ₹80,580 crore. This strategic investment will see Temasek owning a 1.49% to 2.97% stake in Mahindra Electric Automobile Ltd, as stated in the official release by M&M.

The infusion of capital from Temasek and British International Investments (BII), which is already an existing investor in MEAL, propels Mahindra Electric’s valuation by a significant 15%, soaring from up to ₹70,070 crore to up to ₹80,580 crore. Moreover, the investment aligns perfectly with the Mahindra Group’s vision of minimizing dilution while reinforcing its position in the electric vehicle market.

Rajesh Jejurikar, Executive Director and CEO of Auto & Farm Sectors at Mahindra & Mahindra, expressed enthusiasm about the collaboration, saying, “By having Temasek as an investor, we have strengthened our global strategic partnerships and are targeting 20% to 30% of Mahindra SUVs sales from electric vehicles by 2030.”

As part of the agreement, Temasek’s subscription to CCPS grants them certain rights as a shareholder, including governance and affirmative voting rights, pre-emptive rights for future funding rounds, minority protection rights, transfer-related rights, exit rights, and information rights, among others.

Looking ahead, Mahindra Electric aims to leverage the investment to fuel its Capital Investment Program, totaling ₹10,000 crore in MEAL by FY27. This robust plan will further bolster the electric vehicle segment and drive innovation within the company.

Temasek Holdings, a global investment company with a net portfolio value of $287 billion as of March 31, 2023, adds significant financial backing and expertise to Mahindra Electric’s expansion efforts.

In light of this development, the share price of M&M experienced a slight dip of 1.62% at ₹1,461.25 apiece on the BSE at 2:12 pm.

About Dhruv:

Mahindra & Mahindra Limited, a prominent Indian multinational automotive manufacturing corporation with its headquarters in Mumbai, has a rich history dating back to its establishment in 1945 under the name Mahindra & Mohammed. Subsequently rebranded as Mahindra & Mahindra, the company has flourished over the years. As an integral part of the Mahindra Group, M&M holds a distinguished position as one of India’s leading vehicle manufacturers in terms of production capacity.

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