Exclusive Indian automaker Mahindra is in talks to raise up to $500 million for the EV push. | Tech US News

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NEW DELHI/HONG KONG, Sept 22 (Reuters) – Indian carmaker Mahindra & Mahindra ( MAHM.NS ) to raise between $250 million and $500 million to accelerate its plans to build electric vehicles (EVs). is in talks with global investors, a source. told Reuters with direct knowledge of the matter.

Mahindra is in early talks with global green funds and private equity firms, the person said, adding that it wants a long-term investor who can help build its EV business.

Some investors, however, have expressed interest in participating in a funding round worth about $800 million in recent months, two banking industry sources who have discussed such offers with the company said. .

While Mahindra is not actively looking to raise more than $250-$500 million, it is not closed to the idea of ‚Äč‚Äčincreasing the deal size depending on terms and valuation, the first source said.

“Mahindra wants to bring a benchmark investor on board but does not want to dilute a large stake at this time,” he said, adding that the plans are at an early stage and subject to change.

Mahindra’s new EV unit, which it is raising funds for, was valued at $9.1 billion in July after an initial round of $250 million from British International Investments (BII). Read more

It was not immediately clear what value the investors were offering or what the company was looking for in the new round.

Mahindra told Reuters in a statement that it had committed to invest $500 million with BII in the electric SUV space, and that the two companies would partner with other “like-minded, climate-focused investors” in the EV unit. will work together to bring

The talks come weeks after Mahindra outlined an ambitious plan to launch five electric SUVs over the next few years and target such models to account for 30% of its total annual SUV sales by March 2027. Is.

The automaker’s first electric SUV is expected to go on sale in January.

The funds will help the automaker build a war chest to compete against rival Tata Motors ( TAMO.NS ) which dominates India’s nascent electric car market.

Tata last year raised $1 billion from TPG’s Rise Climate Fund at a valuation of $9.1 billion for its EV unit, making it the first major clean mobility deal in India. Read more

In India, the world’s fourth-largest car market, electric models account for just 1% of total annual car sales of around 3 million units. The government wants to increase that to 30 percent by 2030 and is offering billions of dollars in incentives to companies to manufacture EVs and their components locally.

Mahindra has partnered with Germany’s Volkswagen ( VOWG_p.DE ) to procure components such as electric drivetrains and batteries for its electric SUVs, and the two joint vehicle projects, locally manufacturing battery cells and developing charging solutions. are doing

According to local media reports, the Indian carmaker has said it is willing to invest some in a battery cell maker to secure future supplies, and to set up manufacturing capacity for EVs. The need is also being assessed. Read more

Mahindra’s fundraising also comes at a time when investor interest in India’s clean mobility transition is growing, resulting in “a lot of money chasing a few assets,” one of the two banking sources said. .

A third banking source said some of the interest from existing investors came from Mahindra’s earlier fund raising.

Reporting by Aditi Shah in New Delhi, Sumeet Chatterjee in Hong Kong and Sri Ram Mani in Mumbai; Edited by David Evans

Our Standards: Thomson Reuters Trust Principles.

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