Tata Motors and TPG Rise Climate have joined hands to strengthen the brand’s passenger electric vehicle business with equity valuation of up to USD 9.1 bn
Tata Motors and TPG Rise Climate have today announced a binding agreement which sees TPG Rise Climate and ADQ, invest in a newly established subsidiary of Tata Motors. TPG Rise Climate and co-investors shall pump in Rs. 7,500 crore in compulsory convertible instruments to secure between 11 per cent to 15 per cent stake in the company and it translates to an equity valuation of up to USD 9.1 billion.
The new company shall use existing investments and capabilities of Tata Motors and will direct future investments into electrification solutions such as developing EVs, dedicated BEV (Battery Electric Vehicle) platforms, advanced auto technologies, charging infrastructure and battery technologies.
It has also been confirmed that under the new company a complete range of ten electric vehicles will be created over the next half a decade. In partnership with Tata Power, widespread charging infrastructure to facilitate rapid EV adoption in India will be enforced. Speaking of the announcement, N Chandrasekaran, Chairman Tata Motors Ltd commented,
“I am delighted to have TPG Rise Climate join us in our journey to create a market-shaping electric passenger mobility business in India. We will continue to proactively invest in exciting products that delight customers while meticulously creating a synergistic ecosystem. We are excited and committed to play a leading role in the Government’s vision to have 30% electric vehicles penetration rate by 2030.”
The first round of capital infusion will be over by March and the entire funds will be infused by the end of next year as the transaction is subject to conditions precedent and customary approvals. Khaitan & Co are legal advisors to TML, Shardul Amarchand Mangaldas & Co, Cleary Gottlieb are legal advisors to TPG Rise for the transaction.
Morgan Stanley and JP Morgan are the joint financial advisors to Tata Motors Limited while BofA Securities India Ltd are representing TPG Rise Climate. Tata has emerged as the third-largest carmaker in the country in recent times and is currently the best-selling passenger EV producer with a portfolio comprising of Nexon EV and Tigor EV.