TPG Rise Climate, ADQ To Invest Rs. 7,500 Crore In Tata Motors New EV Unit

Tata Motors has announced that the company is entering into a binding agreement with TPG Rise Climate, the dedicated climate investing division of TPG's global impact investing platform. As part of the deal, TPG Rise Climate, along with its co-investor ADQ, will invest $1 billion or Rs. 7,500 crore, in a new electric vehicle (EV) business unit. TPG Rise Climate along with co-investors will secure between 11 to 15 per cent stake in this new subsidiary company, translating to an equity valuation of up to $9.1 billion or over to Rs. 68,600 crore.

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Commenting on the announcement, N Chandrasekaran, Chairman Tata Motors said, "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 per cent electric vehicles penetration rate by 2030."

Tata Motors aims to create a portfolio of 10 electric vehicles, over the next 5 years

The new subsidiary company of Tata Motors will leverage all existing investments and capabilities of its parent company. The carmaker also added that all future investments will be used to develop electric vehicles, dedicated BEV platforms, advanced automotive technologies, along with charging infrastructure and battery technologies. In fact, the company aims to create a portfolio of 10 electric vehicles, over the next 5 years. Furthermore, in association with Tata Power, the company will also invest in building a widespread charging infrastructure to facilitate rapid EV adoption in India.

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The new company, in association with Tata Power, will also invest in building a widespread charging infrastructure to facilitate rapid EV adoption in India

Jim Coulter, Managing Partner TPG Rise Climate and Founding partner of TPG commented, "We are excited to partner with Tata Motors on their mission to lead the electrification of passenger mobility in India. There is significant momentum around India's EV movement, supported by the Government's vision and policies, as well as growing consumer demand for greener solutions. The investment aligns with TPG Rise Climate's focus on decarbonized transport and builds on TPG's long history in India."

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Tata Motors says that the first round of capital infusion is expected to be completed by March 22, while the entire funds will be infused by end of 2022. Morgan Stanley and JP Morgan are the joint financial advisors to Tata Motors Limited, while BofA Securities India Ltd is representing TPG Rise Climate for this transaction. The company further states that the transaction is subject to conditions precedent and customary approvals.