Singapore’s sovereign investment fund Temasek is investing Rs 1,200 crore in Mahindra Electric Automobile Ltd, the electric vehicle arm of Mahindra & Mahindra (M&M).

Temasek will subscribe to compulsorily convertible preference shares of Mahindra Electric at a valuation of up to Rs 80,580 crore, resulting in Temasek’s ownership in a range of 1.49 per cent to 2.97 per cent.

Temasek will join British International Investments as an investor in the Mahindra EV arm.

A statement from M&M said following this investment, the valuation of its EV subsidiary has risen 15 per cent to Rs 80,580 crore from
Rs 70,070 crore.

Mahindra is of the view that the breadth of global experience of these marquee investors will be valuable for the EV venture. In July last year, Mahindra had announced investment up to Rs 1,925 crore by British International in the EV company.

“We demonstrated Mahindra’s ambition to build a desirable global brand with the reveal of our born EV portfolio based on the INGLO platform in August 2022 in the UK, which is on track for execution,” Rajesh Jejurikar, executive director and CEO, auto and farm sectors, Mahindra & Mahindra, said.

“By having Temasek as an investor, we have strengthened our global strategic partnerships and are targeting 20-30 per cent of Mahindra SUV sales from electric vehicles by 2027.’’

News of the transaction failed to lift the Mahindra stock as it declined 1.17 per cent to close at Rs 1,468.35 amid a broad market weakness.

M&M’s play in the EV sector comes at a time Tata Motors is also upping the ante in the same segment.

At a conference call recently, its top management said that the company is aiming for sales of one lakh EV cars by the end of this fiscal year.