Mahindra’s EV unit raises funds from Temasek at $9.8 billion valuation

By Chris Thomas and Aditi Shah

BENGALURU (Reuters) – Mahindra and Mahindra has raised $145 million from Temasek for its electric vehicle unit at a valuation of up to 805.8 billion rupees ($9.8 billion), the latest fundraising by the Indian automaker as it looks to ramp up EV sales.

Temasek will take up to a 3% stake in the company which last year raised up to $250 million from British International Investments (BII) at a valuation of as much as $9.1 billion.

The automaker is aggressively trying to lift the share of its electric SUVs in a market that is dominated by larger rival Tata Motors, as the government pushes to grow EV sales to 30% by 2030 from less than 2% today.

Mahindra said it expects electric models to make up between 20% and 30% of its total SUV sales by March 2027.

“Temasek’s investment is a step forward, as we execute our strategy towards future leadership in electric SUVs,” Mahindra CEO Anish Shah said in a press release.

India’s EV market is small but growing, attracting interest from global players including Tesla.

The world’s biggest EV maker is in talks with the government to invest in a potential factory that would build low-cost EVs, targeting a price of around $24,000. Analysts say this could pose stiff competition for local automakers.

Rival Tata Motors in 2021 raised $1 billion from TPG’s Rise Climate Fund at a valuation of about $9.1 billion.

Mahindra had been in talks with global investors, including green funds and private equity players, for nearly a year to raise between $250 million and $500 million to accelerate its EV plans, Reuters has reported.

Mahindra shares fell as much as 2.5% after the deal and were last trading down 1.2%.

(This story has been corrected to change the year to 2027 after an official revision by the company, in paragraph 4)

(Reporting by Chris Thomas in Bengaluru, Aditi Shah in New Delhi; additional reporting by Navamya Ganesh Acharya; Editing by Nivedita Bhattacharjee, Dhanya Ann Thoppil and Nick Macfie)