M&M, British Int’l Investment to build a portfolio of five e-SUVs by 2027

Mahindra and Mahindra (M&M) and British International Investment (BII) -backed EV Co will also develop a portfolio of five electric SUVs through the first full-fledged business, where the two businesses will integrate in a of Rs 10,000 crore in the next four quarters. year, their officials said Friday.

The deal will help M&M reduce its car capex projected over FY22-26 to Rs 9,975 crore, from Rs 11,900 crore.

BII and M&M have reached a firm agreement to jointly invest Rs 3,850 crore (Rs 1,925 crore each) at a cost of Rs 70,070 crore ($ 9.1 billion) in the so -called EV company, M&M said in a stock market announcement Thursday night. The Indian company will spend Rs 1,925 crore in two tranches – Rs 1,200 crore in June 2023 and Rs 725 crore in some pre -determined projects.

The agreement identifies one of the major investments in the e-mobility space. Mahindra is the latest among the heritage car industry to hit the green record. The company took a leaf out of Tata Motors ’toy book. In October 2021, the Tata Group company sought an investment of $ 1 billion (then Rs 7,500 crore) from TPG Rise Climate for its EV arm, Tata Passenger Electric Mobility (TPEM), at a cost of $ 9.1 billion.

“We are very confident that we will lead this space (EV),” said Anish Shah, MD & CEO, Mahindra and Mahindra, during an investment meeting on Friday. “This isn’t a single investment. It’s a starting point.

Mahindra will also work with BII to bring in other investors into the EV group to compare the demand for funding in a run -off manner, Shah said.

chart

The high expectations for a company now on paper – with no products and only BII funding – didn’t cheer down the road. M&M stock opened 5 per cent at Rs 1,180.25 but gave earnings at the end of the trading season, closing at Rs 1,132.65, down 0.06 per cent. “They (M&M) have a small net worth of $ 250 million and are growing to reach a total value of $ 9.1 billion,” said an analyst at a brokerage.

This is different from Tata Motors.

When Tata Motors signed the deal with TPG, it owned products and a 75 percent share of the e-passenger car market. “So, investors are looking at the whole deal (M & M-BII) with skepticism … Maybe after the announcement of the forecast on August 15, investors will be more confident, “said the appraiser.

The above -mentioned e -SUV will include the electrified power of the XUV3OO (to be called XUV4OO) – which will open in September 2022 and go on sale in January 2023 – and four “births “or clean electric SUV tanks.

In 2026-27, M&M expects its e-SUV segment to account for 20-30 percent of its total SUV market. This will translate into more than 200,000 pieces every year, said Rajesh Jejurikar, director, agriculture and transport services, Mahindra and Mahindra.

The industry company India Automobile Manufacturers (Siam) expects the M&M sector as a percentage of the overall automobile market to grow to 54 per cent, from 50 per cent by 2022, Jejurikar said in its report.

The company will open its “electric birth” project in its newly opened design studio in Oxfordshire, UK, where it has been instrumental in developing these ideas. Mahindra is also looking for a partnership with Volkswagen of Germany to produce EVs, it was announced in May.

The EV team will use Mahindra’s product development facilities in Detroit, Bengaluru, and Chennai. In addition to the production, Mahindra will also be participating in the non -EV segment.

“For BII, it’s a long -term relationship with Mahindra,” said Samir Abhyankar, MD and head of direct personal responsibility at BII. The British -sponsored fund does not plan to invest in a competitive organization, as it currently does.

Sales strategy for the intended EV company

  • BII will spend up to Rs 1925 cr in two installments (Rs.1,200 cr & Rs 725 cr)
  • M&M will also invest Rs 1925 crore
  • BII rating: 2.75% to 4.76%
  • EV Co valuation-Rs70,070 crore ($ 9.1 billion)
  • EV Co will invest in. Rs 8,000 cr between F24-F27

Nuts and keys of EV Co

  • The new one will be a treasure trove
  • M & M’s ED (farm & auto biz) will double down by leading EV Co and presenting the Board
  • M&M provides design, product development, technology and research services
  • M&M and BII will work together to bring other investors to EV Co
  • EV Co will provide all-inclusive, IP-based EV solutions for 4-wheeler e-PVs
  • ICE certificates such as ‘XUV’ are licensed
  • The F27 SUV portfolio is expected to have volumes of 200,000 units/year

.

Leave a Comment

%d bloggers like this: