Mahindra & Mahindra in talks for Rs 5,000 crore EV push from British International, others

Mahindra & Mahindra, India's biggest sports utility vehicle maker by revenue, is in advanced talks with British International Investment (BII) and some other global investors to raise up to ₹5,000 crore ($605 million) for its electric vehicles (EV) unit, multiple people aware of development told ET.

If the discussions on Mahindra Electric Automobile do lead to a favourable conclusion, the British development financier will be making its second-round investment in the Indian conglomerate.

The deal valuation is likely to be worth 10-15% more than the previous round of funding, which had valued Mahindra's EV subsidiary at ₹70,070 crore ($9.1 billion), said one of the sources cited above.


BII had earlier signed an agreement with Mahindra Electric to invest ₹1,925 crore ($250 million) in July 2022 through compulsory convertible preference shares, which would result in a stake of 2.75-4.76%, depending upon milestones achieved.

A similar amount was to be invested by Mahindra in the electric vehicles subsidiary by way of equity.

"Even though we have not appointed a banker to commence fundraising, our EV business continues to attract interest from investors," said a Mahindra spokesperson in an emailed response to ET's queries.

"Our approach has been consistent in terms of raising a small amount of funds to reduce dilution," the Mahindra spokesperson added.

A spokesperson from BII declined to comment.

Mahindra's second round of fundraising for its EV arm comes amid intensifying local competition. Auto firms in India are seeking external funding to accelerate product launches and ramp up capacities in the EV segment to meet stiff de-carbonisation goals.

Mahindra has outlined a capital expenditure of close to Rs 10,000 crore in its EV subsidiaries between FY22 and FY27, the company said in customary disclosures to stock exchanges. Of this, Rs 4,000 crore will be invested between FY22 and FY24, and the balance until FY27.

Mahindra plans to launch five new EV models between April and October 2025. The carmaker expects e-SUV penetration to reach 20-30% of its overall SUV portfolio, translating into volumes of around 200,000 units.

Till May, M&M has dispatched 3,690 units of XUV 400, an e-SUV launched this January. This accounted for nearly 2.2% of total passenger vehicles sold during the period.