Mahindra and global investors are in discussions to raise between $250 million and $500 million (roughly Rs. 4,040 crore) to accelerate their efforts to construct electric automobiles, according to a source with direct knowledge of the situation.
The person said Mahindra is in early discussions with global green funds and private equity firms, adding that it wants a long-term investor to assist expand its EV business.
Several investors have shown interest in participating in a funding round of around $800 million (roughly Rs. 6,470 crore), according to two banking industry sources, adding that they have contacted the company about such proposals.
The first source said that while Mahindra is not actively looking to raise a higher amount than $250 million (roughly Rs. 2,020 crore) - $500 million.
"Mahindra wants to bring a high-ranking investor on board, but does not intend to deprive a large share at the moment," he said, adding that these plans are at an early stage and subject to changes.
Mahindra''s new electric vehicle, which is raising funds, was valued at $9.1 billion in July, and received $250 million in funding from British International Investment (BII).
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It was not immediately clear what valuation the investors are offering or what the company is looking for for the next round.
Mahindra expresses his desire to invest $500 million in the electric SUV space along with the BII, saying that the two companies will collaborate to bring other "like-minded, climate-focused investors" in the EV unit.
The discussions come weeks after Mahindra outlined an ambitious plan to build five electric SUVs over the next few years and is aiming for such models to make up 30% of its annual SUV sales by March 2027. The first electric SUV is expected to be available for sale in January.
The money will assist the automobilemaker build a war chest to compete with Tata Motors, which is leading India''s most populous electric automobile market.
Tata received $1 billion (roughly Rs. 8,080 crore) from TPG''s Rise Climate Fund for its EV subsidiary, a valuation of $9.1 billion, making it the first major clean mobility acquisition in India.
Electric cars constitute a quarter of the total annual vehicle sales of over 3 million units in India, the fourth largest in the world. The government wants to increase this to 30 percent by 2030 and is offering firms billions of dollars to assist in developing electric vehicles and their components locally.
Mahindra has partnered with Volkswagen to purchase electric SUV components, including batteries locally, and is developing charging solutions. The Indian automaker has said that it is open to making some investments in a battery cell manufacturer to obtain future supply, but is also considering the need to establish manufacturing capacity for EVs, according to local media reports. Mahindra''s fundraising comes at a time when India''s clean mobility transition has sparked "more money chasing little assets."
According to a third banking source, some of the current investor interest is a result of Mahindra''s first fundraise.
2022, Thomson Reuters