Mahindra & Mahindra to raise Rs 5,000 crore for its EV business: Report

Mahindra & Mahindra is in talks with British International Investment (BII) and some other investors to raise Rs 5,000 crore for its electric vehicles (EV) unit, The Economic Times (ET) reported on Monday.

If the deal goes through, it will be BII's second round of investment in India's biggest sports utility vehicle maker by revenue. Its earlier fund infusion was done at a valuation of Rs 70,070 crore. The new deal is expected to value the company at 10-15 per cent more than that.

In July 2022, the British development financier invested Rs 1,925 crore through compulsory convertible preference shares.

Mahindra Electric is expected to infuse about Rs 10,000 crore in its EV unit in Telangana between 2021 and 2027. According to ET, it expected e-SUV penetration at 20-30 per cent of its overall SUV portfolio. Between April and October 2025, the company will launch five new EV models.

"Even though we have not appointed a banker to commence fundraising, our EV business continues to attract interest from investors," a Mahindra spokesperson was quoted in the ET report.

"Our approach has been consistent in terms of raising a small amount of funds to reduce dilution," it added.

Out of this, Rs 4,000 crore will be invested between FY22 and FY24.

The fundraising comes at a time when several other automakers are accelerating the launches of their new products and ramping up capacities in the EV segment to meet de-carbonisation goals.