M&M raises Rs 1925 crore for EV arm

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The British International Investment (BII), the UK’s development finance institution and  Mahindra & Mahindra (M&M) have executed a binding agreement to invest up to Rs 1925 crore each into a wholly-owned subsidiary of M&M that will be newly incorporated, the company said in a statement late on Thursday.  

BII will invest up to Rs 1,925 crores in the form of compulsory convertible instruments at a valuation of up to Rs. 70,070 crores, resulting in 2.75 percent to 4.76 percent ownership for BII in the EV company.  The EV company will focus on four-wheel passenger electric vehicles.

The total capital infusion for the EV company  is envisaged to be approximately Rs. 8,000 crore / USD 1 billion between fiscal 2024 and fiscal 2027 for the planned product portfolio. “M&M and BII will work jointly to bring  other like-minded investors in the EV company to match the funding requirement in a phased manner.” the statement said.

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 EV company will significantly leverage the broader manufacturing capabilities, product development, design organisations along with the ecosystem of suppliers, dealers, and financiers of M&M. The funds will be  utilised primarily to create and market a world-class electric SUV portfolio with advanced technologies.

The investment alongside M&M in the new EV company supports BII’s undertaking that at least 30 percent  of its total investments will be in climate finance.


M&M has confirmed that it will launch an electric version of the XUV300 in January 2023.

Dr. Anish Shah, MD & CEO, M&M said, “We are extremely delighted to have BII as a partner in our SUV electric journey. In BII, we have found a like-minded long-term partner who is committed to combating the climate emergency. The Mahindra Group aims to be Planet Positive by 2040. Mahindra has been a pioneer in the electric vehicles space, and we are confident we will be the leaders in the electric SUV market in the future.”

Nick O’Donohoe, CEO, British International Investment, said, “BII’s anchor investment will be  key to attracting additional sources of private capital into this exciting venture with the Mahindra Group. The 

acceleration of EV development in India will be critical to supporting the country in reaching its emission  targets as well as improving air quality in many urban areas. Mahindra will play a central role in the  decarbonisation of the automotive industry in India and elsewhere.”

Rajesh Jejurikar, Executive Director – Auto & Farm Sectors, M&M said,” “Mahindra has very exciting plans to be a leader in the electric SUV space. We would share our vision that  includes our comprehensive product, technology, and platform strategy at the UK event on 15 August 2022, followed by a reveal of the electric XUV 400 in September 2022. We would expect between 20 percent and 30 percent of Mahindra SUVs being electric by 2027.”

Samir Abhyankar, Managing Director and Head of Direct Private Equity, British International Investment, said, “The investment into Mahindra’s EV business is in line with our decarbonization strategy and focus of supporting sustainable business models that create new jobs, particularly for women. We are delighted to be backing Mahindra to execute on their  compelling EV strategy and ambition and crowd in other like-minded investors in the future.”

According to a recent survey by Roland Berger, an automotive consulting company, Indian consumers are twice as likely as their counterparts in the UK and the US to consider the purchase of an EV.

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