Tata Motors and TPG Rise Climate on October 12 entered into a binding agreement whereby TPG Rise Climate along with its co-investor ADQ, will invest in a subsidiary of Tata Motors that will be newly incorporated.
According to a press release, TPG Rise Climate along with co-investors will invest Rs 7,500 crore in compulsory convertible instruments to secure between 11 to 15 per cent stake in this company translating to an equity valuation of up to $9.1 billion.
The new company will leverage all existing investments and capabilities of Tata Motors Ltd and will channelise the future investments into electric vehicles, dedicated BEV platforms, advanced automotive technologies and catalyse investments in charging infrastructure and battery technologies, said the release.
Over the next five years, this company will create a portfolio of 10 EVs and in association with Tata Power, catalyse the creation of a widespread charging infrastructure to facilitate rapid EV adoption in India, added the release.
Mr. N Chandrasekaran, Chairman Tata Motors Ltd, said, “I am delighted to have TPG Rise Climate join us in our journey to create a market-shaping electric passenger mobility business in India. We will continue to proactively invest in exciting products that delight customers while meticulously creating a synergistic ecosystem.”
Mr. Jim Coulter, Managing Partner, TPG Rise Climate and Founding partner of TPG, commented: “We are excited to partner with Tata Motors on their mission to lead the electrification of passenger mobility in India. There is significant momentum around India’s EV movement, supported by the Government’s vision and policies, as well as growing consumer demand for greener solutions. The investment aligns with TPG Rise Climate’s focus on decarbonised transport and builds on TPG’s long history in India.”
It is expected that the first round of capital infusion will be completed by March 22 and the entire funds will be infused by end of 2022. Morgan Stanley and JP Morgan are the joint financial advisors to TML, while BofA Securities India Ltd is representing TPG Rise Climate for this transaction.