CNBC-TV18 Newsbreak Confirmed: Temasek to invest Rs 1,200 crore in M&M's EV business

The Rs 80,580 crore valuation at the current fund infusion is the highest valuation for any EV company in India. In US Dollar terms, M&M's EV business is now valued at $9.8 billion, which is 15 percent higher than when British International Investment had invested last year at a $9.1 billion valuation.

In July 2022, M&M, along with British International Investment signed a binding agreement to invest as much as $250 million each into Mahindra's EV subsidiary.

Temasek will be subscribing to the Compulsorily Convertible Preference Shares of MEAL in one or more tranches. Post the fund infusion, Temasek's shareholding will be between 1.49 percent to 2.97 percent of MEAL's paid-up share capital, on a fully diluted basis.

On subscribing to the CCPS, Temasek will get governance and affirmative voting rights, pre-emptive rights to participate in future fund raising rounds and minority protection rights.

"Temasek’s investment is a step forward, as we execute our strategy towards future leadership in electric SUVs," M&M's MD & CEO Anish Shah said.

In earlier interactions, the management of M&M has mentioned that they are open to raising funds for the electric SUV business. The company estimated an investment requirement of as much as Rs 10,000 crore for the EV business over the next two-to-three years.

Rajesh Jejurikar, ED & CEO of M&M's Auto and Farm divisions said that by having Temasek as an investor, the company has strengthened its global strategic partnerships and is targeting 20-30 percent of its overall SUV sales via EVs by 2027.

Shares of Mahindra & Mahindra are trading 1 percent lower at Rs 1,470. The stock fell off the day's high post the announcement. The company will be reporting its June quarter results on Friday, August 4.