With proceeds from the Production Linked Incentive (PLI) Scheme likely soon, Tata Motors does not appear in a rush to raise for its EV arm, Tata Passenger Electric Mobility. The country’s largest EV maker is well capitalised at the moment, with US$ 1 billion of the planned US$ 2 billion investment in its EV business already raised. This is thanks to rising scale, falling battery prices and about 13 to 18% of vehicle costs likely to be funded by PLI benefits. 

Moreover, the EV business of Tata Motors is already EBITDA break-even (excluding product investment). With rising volumes, this is likely to turn EBITDA positive (including product development cost) in the coming quarters with rising volumes, said PB Balaji, Group CFO of Tata Motors.  

Bajali pointed out what also helped was that Tata Motors was able to acquire the Sanand plant in Gujarat "at a competitive rate, Balaji said.

“This helped us manage some of the spending at the lower end of the range. Overall, we are quite secure in our funding. Now there are no plans of raising capital there, and I don't see any stress on that," he stated. 

“We’re running part of our business from an earlier round of fundraising. PLI incentives, which the company will start accruing next year, will make up the remaining, Balaji elaborated on their funding plan, speaking at the Q3 FY24 earnings call. “The certification from Automotive Research Association of India (ARAI) is coming through, so we should get the money next year onwards.”

In 2021, the automaker had announced its plan to raise US$ 2 billion to fund its EV wing. Of this, it raised US$1 billion from TPG Rise Climate for 11 to 15% stake, with the business earning a handsome valuation of roughly US$ 9.1 billion.

In the earlier part of FY24, Tata Motors had reportedly appointed Morgan Stanley to scout for investors, but the talks did not come to fruition. Also, post 2021-22, the broader fundraising market underwent a shake-up due to the US Federal Reserve raising interest rwordates and fears of a global economic slowdown.