Temasek to invest Rs 1200 crore into Mahindra Electric Automobile at a $9.8 billion valuation
Temasek, a Singapore-based international investment company, and Mahindra & Mahindra have signed a legally binding agreement for Temasek to invest Rs 1200 crores in MEAL (Mahindra Electric Automobile Limited), a manufacturer of four-wheeled (4W) passenger electric vehicles, according to a filing made by Mahindra & Mahindra to the stock exchanges.
Temasek would invest Rs. 1200 crores in Compulsorily Convertible Preference Shares (CCPS) with a potential market value of up to Rs. 80,580 ($9.8 billion), giving Temasek a 1.49% to 2.97% stake in MEAL.
The company’s plans to raise money were covered in an article by ET in its July 10 issue. MEAL is now India’s most valuable EV company according to the valuation. Tata Motors raised $1 billion in 2021 for its EV unit at a $9 billion valuation from TPG and the Abu Dhabi state holding company ADQ.
Temasek will become a shareholder in MEAL alongside British International Investments (BII). With this investment, Mahindra’s EV subsidiary will be valued at up to Rs. 80,580 crores, an increase of 15%. “These renowned investors’ extensive global experience will be helpful to MEAL. According to the company’s statement, the investment amount is consistent with the Mahindra Group’s strategy to reduce dilution. The most recent round of financing is a part of the business plan that calls for a total investment in MEAL of Rs10,000 crores by FY27. To fund MEAL, BII contributed Rs 1925 crore.
“We are extremely delighted to have Temasek as a partner in our electric SUV journey. Globally known for their strong governance, Temasek’s investment is a step forward, as we execute our strategy towards future leadership in electric SUVs. The valuation of up to $9.8 billion is testimony to Mahindra’s EV business and the progress we have made in the journey towards scaling up the electric SUV portfolio,” Anish Shah, MD & CEO, M&M said in the statement. Rajesh Jejurikar, executive director and CEO, of auto and farm sectors, Mahindra & Mahindra said the company has demonstrated Mahindra’s ambition to build a desirable global brand with the reveal of its born EV portfolio based on the INGLO platform in August 2022 in the UK, which is on track for execution.
“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 2027,” said Jejurikar.
According to the terms of the aforementioned agreements, Temasek will receive the following benefits with the aforementioned investment: minority protection rights, transfer-related exit rights, customary information rights, governance and affirmative voting rights, and pre-emptive rights to participate in future funding rounds.