M&M, BII revise final investment tranche in Mahindra Electric to Rs 650 crore

Mahindra & Mahindra Ltd and the UK government’s British International Investment Plc (BII) have revised the terms of the financial tranche of BII’s funding in the Indian automaker’s electric vehicle arm Mahindra Electric Automobile Ltd (MEAL) to Rs 650 crore from the previously planned Rs 725 crore. The investment will be completed by March 31.

In May, M&M and BII extended the timeline for the final tranche and agreed to reassess the funding requirement by December 31. Following a joint assessment of funding requirements for MEAL, M&M and BII have mutually agreed that the final tranche of BII Group’s investment would be Rs 650 Crores to be completed by March 31, 2025, M&M said in an exchange filing today.

With this, BII’s total investment in MEAL through two tranches will now be Rs 1,850 crore and BII will get a stake in the range of 2.6-4.6% in MEAL. The earlier total planned investment in MEAL was around Rs 1,925 crore. M&M noted that the change in funding would have no bearing on MEAL’s overall business plan.

BII’s investment is designed to significantly accelerate the availability and adoption of electric vehicles in India and other markets served by M&M. The funds are being utilized primarily to create and market a world-class electric SUV portfolio with advanced technologies.

BII has invested Rs 1,200 crore in MEAL in the first tranche. Apart from BII, Singapore-based investment company Temasek is also an investor in Mahindra's electric vehicle subsidiary. In 2023, Temasek announced an investment of Rs 1,200 crore in MEAL for 1.5-3% stake in the company.

In November, M&M unveiled its first set of Born Electric SUVs - BE 6 and XEV 9e - at a starting price of Rs 18.9 lakh and Rs 21.9 lakh, respectively (ex-showroom). The company is likely to start deliveries to the two models, built on INGLO (Intelligent Electric Global) architecture, in late February or early March.

Born Electric portfolio is part of M&M's broader strategy to establish itself as a leading player in the EV sector. The company had earlier shared an expectation of 20-30% EV penetration by 2027. At the start of this financial year, M&M’s board also approved an investment of Rs 12,000 crore into its electric business MEAL over the next three years.