Temasek to invest Rs 1,200 crore in Mahindra’s EV arm at a valuation of US$ 9.8 billion

Mahindra & Mahindra – India’s number two SUV maker in terms of volumes and Temasek, the Singapore-headquartered global investment firm, have executed a binding agreement for Temasek to invest Rs 1,200 crore into MEAL (Mahindra Electric Automobile Limited), the four-wheeler (4W) passenger electric vehicles company.

Temasek will invest Rs 1,200 crore in the form of Compulsorily Convertible Preference Shares (‘CCPS’) at a valuation of up to Rs 80,580 crore, resulting in Temasek’s ownership of a 1.49% to 2.97% stake in MEAL, the company said in a statement to Bombay Stock Exchange.

Temasek will join British International Investments (BII) as an investor in MEAL.

With this investment, Mahindra’s EV subsidiary’s valuation goes up by 15% from up to Rs 70,070 crore to up to Rs 80,580 crore.

The breadth of global experience of these marque investors will be valuable for MEAL. The amount invested is consistent with the Mahindra Group’s plan to minimise dilution, the statement from the company added.

Anish Shah, MD and CEO, Mahindra & Mahindra said, “We are extremely delighted to have Temasek as a partner in our electric SUV journey. Globally known for their strong governance, Temasek’s investment is a step forward, as we execute our strategy towards future leadership in electric SUVs. The valuation of up to US$ 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.”

Rajesh Jejurikar, Executive Director and CEO, Auto & Farm Sector, Mahindra & Mahindra, commented, “We demonstrated Mahindra’s ambition to build a desirable global brand with the reveal of our born EV portfolio based on the INGLO platform in August 2022 in the UK, which is on track for execution. By having Temasek as an investor, we have strengthened our global strategic partnerships and are targeting 20% to 30% of Mahindra SUVs sales from electric vehicles by 2027.” 

BII had earlier signed an agreement with Mahindra Electric to invest Rs 1,925 crore (US $250 million) in July 2022 through compulsorily convertible preference shares, which would result in a stake of 2.75-4.76%, depending upon milestones achieved.

Mahindra had revealed five of its much-anticipated electric SUVs in August 2022, based on the new INGLO EV skateboard platform, to be sold via two new sub-brands – XUV.e and BE.

For now, the XUV.e will have two models, the XUV.e8 and XUV.e9, while the BE will consist of three SUVs, the BE.05, BE.07, and the BE.09. The XUV.e range of models will go on sale first, with the XUV.e8 set to arrive in December 2024, while the first of BE models will arrive in October 2025.