Mahindra & Mahindra (M&M) is spinning off its last mile mobility business into a new company in which IFC, the World Bank arm, will invest Rs 600 crore.
The new company will be a wholly owned subsidiary of Mahindra & Mahindra and it is being done to scale up affordable electric three-wheelers and small commercial vehicles.
A statement from M&M said that the formation of the subsidiary and IFC’s investment will be a gamechanger for microentrepreneurs.
The investment will pave the way for the industry’s seamless shift from fossil fuel to electric vehicles.
This will be IFC’s first investment in an EV manufacturer in India and the first in electric three-wheelers globally. It 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 the ownership of 9.97-13.64 per cent for IFC in the new company. This firm, M&M added, will house the last mile mobility division, including three-wheelers (Alfa, Treo, Zor) and four-wheeler SCV (Jeeto).
“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.
Shares of M&M reacted positively to the announcement and they ended with gains of 0.37 per cent at Rs 1,164.40.
IFC’s regional director for South Asia Hector Gomez Ang said India is the largest three-wheeler market, and its investment would mark a significant step towards scaled domestic production of electric vehicles.
Funds for JK Tyre
JK Tyre & Industries Ltd on Wednesday said IFC will invest $30 million (about Rs 240 crore) to pick a 5.6 per cent stake in the company to partfund expansion of energy-efficient tyre manufacturing.
The investment by IFC in JK Tyre & Industries will part-finance the expansion of manufacturing capacities and integrate advanced, resource-efficient technologies in the production of commercial and passenger car radial tyres, which have better safety and longevity, the company said in a regulatory filing.
