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TPG Group to invest Rs 7,500 crore in Tata Motors' new electric vehicle subsidiary at $9.1-bilion valuation

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Tata Motors on Tuesday said TPG Group will be investing Rs 7,500 crore in its new wholly-owned electric vehicle subsidiary.

Tata Group on Tuesday said the US-based private equity company TPG Capital will invest Rs 7,500 crore in homegrown auto major Tata Motors Ltd's (TML) new electric vehicle subsidiary.
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 to 15 percent stake in this company translating to an equity valuation of up to $9.1 billion, a press release from Tata Motors said.
The new wholly-owned electric vehicle subsidiary of Tata Motors, TML EVCo, will undertake the passenger electric mobility business. The first round of capital infusion will be completed by March 22 and the entire funds will be infused by end of 2022, it said.
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The new company shall leverage all existing investments and capabilities of Tata Motors and will channelise the future investments into electric vehicles, dedicated BEV platforms, advanced automotive technologies and catalyse investments in charging infrastructure and battery technologies, it said.
Over the next five years, this company will create a portfolio of 10 EVs and in association with Tata Power Ltd, catalyse the creation of widespread charging infrastructure to facilitate rapid EV adoption in India.
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 a 30% electric vehicles penetration rate by 2030."
Jim Coulter, Managing Partner TPG Rise Climate and Founding partner of TPG, said, "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."
Morgan Stanley and JP Morgan were the joint financial advisors to Tata Motors on the deal, while BofA Securities India was representing TPG Rise Climate for this transaction.