Tata Motors raises close to $1 billion for EV business

Tata Motors Ltd (TML) and TPG Rise Climate on Tuesday announced that both the companies have entered into a binding agreement today. TPG Rise Climate along with its co-investor ADQ, shall invest in a subsidiary of Tata Motors that will be newly incorporated.

Tata Motor will raise an investment of ₹7,500 Cr in compulsory convertible instruments from TPG Rise Climate (along with co-investors) for 11 % to 15 % stake in the company translating to an equity valuation of up to $9.1 bn.

The newly incorporated company shall leverage all existing investments and capabilities of Tata Motors Ltd. In addition to that, it will also channelise the future investments into battery-powered vehicles, dedicated BEV platforms, advanced automotive technologies and catalyse investments in charging infrastructure and battery technologies.

The company announced in a press note that within the time frame of the next five years, the new company will create a portfolio of 10 EVs. Moreover, in close coordination with Tata Motors, this company will also catalyse the creation of widespread charging infrastructure in the country.

N Chandrasekaran, Chairman Tata Motors Ltd commented, “I am delighted to have TPG Rise Climate join us in our journey to create a market-shaping electric passenger mobility business in India. We will continue to proactively invest in exciting products that delights customers while meticulously creating a synergistic ecosystem. We are excited and committed to play a leading role in the Government’s vision to have 30% electric vehicles penetration rate by 2030."

As per details of the press note, the first round of capital infusion is slated to be completed by March 22, while the complete funds are expected to be infused by end of 2022.