Singapore’s sovereign wealth fund Temasek has agreed to invest up to Rs 1,200 crore (around $145 million) in Mahindra & Mahindra’s electric four-wheeler vehicle unit, that was set up last year in October, as the automaker ramps up its focus on the segment.
Temasek, through its Jongsong Investments Pte. Ltd, may buy a stake between 1.49-2.97% as a part of the deal, valuing Mahindra Electric Automobile Ltd (MEAL) at about Rs 80,580 crore ($9.8 billion).
“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,” said Anish Shah, managing director and chief executive of Mahindra & Mahindra Ltd.
The amount invested is consistent with the Mahindra Group’s plan to minimize dilution, the company said in a statement.
The Singapore-based global investment firm is the second international investment in MEAL, following British International Investments’ (BII) infusion of Rs 1,925 crore for a 4.76% stake. MEAL was valued at about Rs 70,070 crore after that transaction in February earlier this year.
The latest deal is at a markup of about 15% from its last valuation.
“We demonstrated Mahindra’s ambition to build a desirable global brand. We are targetting 20-30% of Mahindra SUVs sales from electric vehicles by 2027,” Rajesh Jejurikar, executive director and CEO, Auto & Farm Sectors, Mahindra & Mahindra, said.
The latest deal comes amid Indian automakers to propulsion to electric vehicles.
Its local rival Tata Motors and SoftBank-backed Ola Electric are also ramping up their EV business. Tata Motors, the owner of Jaguar and Land Rover luxury cars, raised $1 billion from private equity firm TPG and Abu Dhabi sovereign wealth fund ADQ in 2021.
Four months ago, Mahindra got World Bank Group’s private-sector investment arm International Finance Corporation (IFC) to invest Rs 600 crore ($72.6 million) in its new unit that will make electric three-wheelers and small commercial vehicles.
