TPG Group to invest Rs 7500 crore in Tata Motors EV arm at valuation of $9.1 bn – check details here

TPG Rise will invest $1 billion (around Rs 7,500 crore) at a valuation of up to $9.1 billion in passenger electric vehicle (PEV) subsidiary of Tata Motors Limited, the company today announced in its filing to exchanges. The announcement was made after market hours.

“TPG Rise Climate to be the lead investor while ADQ to be a co-investor,” The company in its investor presentation pointed out, the company in its investor presentation said.

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TPG Rise Climate is a $7 billion fund with a focus on investing in companies that enable carbon reduction in a quantifiable way.

“TPG Rise has made a commitment of Rs 7,500 Cr ($1 bn), of which 50 per cent of the transaction would be completed by March 22 post set-up of the EVCo (Electric Vehicle Company) and balance 50 per cent by Q3 2022 on achieving ‘Go Live’ actions,” the exchange filing said.

TPG Rise Climate along with co-investors shall invest in compulsory convertible instruments to secure between 11 to 15 per cent stake in this new company translating to an equity valuation of up to $9.1 billion. 

The company mentions, “After TML EVCo is incorporated, Tata Motors and TPG Rise Climate will enter into a shareholders’ agreement as a condition precedent to the Proposed Transaction on mutually agreed terms in relation to the right to appoint a director and certain reserved matters.”

“The new company shall leverage all existing investments and capabilities of Tata Motors Ltd and will channelise the future investments into electric vehicles, dedicated BEV platforms, advanced automotive technologies and catalyse investments in charging infrastructure and battery technologies,” the company said in a press statement.

The stock on Tuesday for the second straight session hit a new 52-week high to Rs 435.65 per share intraday, to eventually close over 1 per cent to Rs 420.8 per share on the BSE.