New Delhi, Mar 22: Mahindra & Mahindra on Wednesday said World Bank Group arm IFC will invest Rs 600 crore in a new unit of the company, which is being incorporated to scale up the last-mile electric mobility business.
IFC is investing Rs 600 crore in a new last-mile mobility (LMM) company — a wholly-owned subsidiary of Mahindra & Mahindra — that will be newly incorporated (NewCo), the Mumbai-based automajor said in a statement.
IFC’s first investment in an EV manufacturer in the country and the first in electric three-wheelers globally will be in the form of compulsory convertible instruments at a valuation of up to Rs 6,020 crore.
The Rs 600 crore investment will result in an ownership of between 9.97 per cent to 13.64 per cent for IFC in NewCo.
The NewCo will house the last-mile mobility division, including three-wheelers (Alfa, Treo, Zor) and four-wheeler SCV (Jeeto), Mahindra & Mahindra said.
IFC’s financing will help scale up electric mobility in last-mile connectivity — passenger and cargo segments — while enabling the development and manufacturing of new generation products in this space, it added.
“Decarbonising the transport sector is crucial to achieving the climate goals that India has set for herself. IFC, with its focus on sustainability and boosting prosperity, is an ideal partner for us,” Mahindra & Mahindra MD and CEO Anish Shah said.
IFC’s Regional Director for South Asia Hector Gomez Ang said India is the largest three-wheeler market globally, and this investment marks a significant step towards scaled domestic production of electric vehicles catering to this segment as well as small commercial vehicles.
“By supporting a leading market player, IFC hopes to encourage other large automotive manufacturers to follow suit, driving EV adoption across India and helping the government deliver on its climate targets,” he added.
Decarbonising the transport sector, which contributes about 13 per cent of the country’s greenhouse gas (GHG) emissions, can help substantially reduce the impacts related to GHG emissions and other air pollutants.
This is vital given that India has committed to reducing its emissions profile by 45 per cent by 2030.
Mahindra & Mahindra Executive Director and CEO (Auto & Farm Sector) Rajesh Jejurikar noted that the last-mile mobility business presents a tremendous opportunity, both in terms of electrification and growth.
“Being the market leaders in this segment, we have an opportunity to drive higher EV penetration in this segment and provide a more sustainable as well as profitable option to microentrepreneurs,” he added. (PTI)
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