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.

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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