BII will invest up to INR 1,925 crore in the form of compulsory convertible instruments at a valuation of up to INR 70,070 crore, resulting in 2.75% to 4.76% ownership for BII in the EV Co. The EV Co. will focus on four-wheel (4W) passenger electric vehicles.
The total capital infusion for the EV Co. is envisaged to be approximately INR 8,000 crore between FY24 and FY27 for the planned product portfolio. M&M and BII will work jointly to bring other like-minded investors in the EV Co. to match the funding requirement in a phased manner, the company said in a media release.
BII's investment is designed to significantly accelerate the availability and adoption of electric vehicles in India and other markets served by M&M. The investment alongside M&M in the new EV company supports BII's undertaking that at least 30% of its total investments will be in climate finance.
The EV Co. will significantly leverage the broader manufacturing capabilities, product development, design organizations along with the ecosystem of suppliers, dealers, and financiers of M&M. The funds will be utilized primarily to create and market a world-class electric SUV portfolio with advanced technologies, the company added.
It is expected that the first round of BII's capital investment will be completed by June 2023 on fulfilment of conditions precedent and the balance post completion of certain milestones in FY24. Khaitan & Co. is legal advisors to Mahindra. Cyril Amarchand Mangaldas and Cleary Gottlieb are legal advisors to BII for the transaction.
Anish Shah, MD & CEO, Mahindra & Mahindra Ltd. said, "We are extremely delighted to have BII as a partner in our ,nded long-term partner who is committed to combating the climate emergency. The Mahindra Group aims to be Planet Positive by 2040. Mahindra has been a pioneer in the electric vehicles space, and we are confident we will be the leaders in the electric SUV market in the future."
Nick O'Donohoe, CEO, British International Investment, said, "BII's anchor investment will be key to attracting additional sources of private capital into this exciting venture with the Mahindra Group. The acceleration of EV development in India will be critical to supporting the country in reaching its emission targets as well as improving air quality in many urban areas. Mahindra will play a central role in the decarbonisation of the automotive industry in India and elsewhere."
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