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Tata Motors' EV orderbook at 3,000-3,500 per month; fundraise via TPG deal sufficient, says management

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Tata Motors earlier announced that the US-based private equity major TPG Capital will invest Rs 7,500 crore in the company's new electric vehicle (EV) subsidiary. “At this point of time close to about Rs 7,500 crore are coming in by end of next year, which we believe is sufficient in terms of the immediate plans that we have to grow. We will see how this thing progresses - if we need, we will raise,” said PB Balaji, CFO of Tata Motors.

Tata Motors has announced that the US-based private equity major TPG Capital will invest Rs 7,500 crore in the company's new electric vehicle (EV) subsidiary. The board of directors of TML at its meeting on October 12 gave the approval to incorporate a wholly-owned subsidiary to undertake the automaker's passenger electric mobility business.
TPG Capital's new climate-focused financial fund, TPG Rise Climate, along with co-investors shall invest Rs 7,500 crore in compulsory convertible instruments to secure between 11 percent and 15 percent stake in this company translating to an equity valuation of up to USD 9.1 billion.
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PB Balaji, CFO and Shailesh Chandra, President of PV Business at Tata Motors along with Ankur Thadani, Business Unit Partner of TPG Rise discussed what this investment means for the EV ecosystem as a whole and whether they plan to, at any point in time, list the newly formed subsidiary.
“Currently the business is now tracking at about 1,000 vehicles a month and anywhere between Rs 500 crore and Rs 600 crore is the kind of rate that we are currently running at. More importantly, we start to look at the order book that we are building - starting to move close to about 3,000-3,500 orders a month, so if supplies are able to keep up, we do not see any reason why we will not be able to meet this order situation,” said Balaji.
The company says that it is starting to see the expansion coming through in the charging infrastructure as well as new products.
"We see this potential for growth to be quite significant in this particular business as we go forward and that is the reason we believe that this is the right time to start investing in this and step up the gaps as far as this particular business is concerned,” he said.
TPG looks at the investment as a long-term one and is focused on electrification and decarbonisation of transport.
"Tata Group has the vision, has the commitment, has sponsorship towards sustainability, what Tata Motors, led by Shailesh Chandra, PB Balaji and the team, has achieved in terms of market leadership today - we are really looking at this as a long-term investment bet that we are making with the group and with the company to achieve this global imperative solution, which is to electrify our transportation,” said Thadani.
“We want to be a force multiplier for businesses like these and generate not just very good financial returns but also very good social and economic returns for the society,” he added.
Tata Motors has a comprehensive plan regarding its eclectic foray and it will evolve in phases - generation one to generation three. Generation three products will start moving towards EVs which will be optimized, made more efficient cost and performance-wise, according to the management.
"This will be leveraging completely in terms of the new technologies which are going to be the future in the EV space and this is how we are going to work towards these ten products that we have spoken about in the next five years plan,” Chandra explained.
According to Chandra, the Indian market has a big opportunity right now in the next decade through internal combustion engine (ICE) as well as in the EV space for passenger vehicles.
“We can expect two times growth in the next 10 years as far as the PV industry in India is concerned. One and a half times would come from ICE, which means till 50 percent growth that we can expect in the ICE – so it is a growing market on the ICE side – and the EV will start penetrating to the extent of 30 percent, so 0.5 times would come from the EVs. So there is an opportunity to grow in both the segments,” he said.
In terms of listing plans, Balaji said, “At this point in time there are no plans for listing any entity. Our job is to win with the customers first and there are very clear strategies laid out for each of the businesses, CV will have to win decisively, PV will have to win sustainably and EV will have to win proactively. Value discovery, value unlocks are separate conversations and it will happen when the board in its wisdom decides when it wants to do that.”
For the entire discussion, watch the accompanying video.
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