Tata Motors secures Rs 7,500 Crore from TPG Rise Climate for EV business

New Delhi: Tata Motors Ltd (TML) and TPG Rise Climate have announced the signing of a definitive agreement in which TPG Rise Climate, along with its co-investor ADQ, will invest in a newly created Tata Motors subsidiary. TPG Rise Climate and co-investors will invest Rs 7,500 crore in mandatory convertible instruments to achieve an 11 percent to 15 percent ownership in this company, equating to an equity valuation of up to $9.1 billion.

According to a statement released by Tata Motors, the new company will leverage all of Tata Motors Ltd's existing investments and capabilities, channelling future investments into electric vehicles, dedicated BEV platforms, advanced automotive technologies, and catalysing investments in charging infrastructure and battery technologies. Over the next five years, this business will develop a portfolio of ten electric vehicles and, in collaboration with Tata Power Ltd, will catalyse the development of ubiquitous charging infrastructure to promote rapid EV adoption in India.

N Chandrasekaran, Chairman Tata Motors Ltd commented, “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% electric vehicles penetration rate by 2030.”

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.”

The first round of capital infusion is planned to be finished by March 22, with the remaining monies infused by the end of 2022. According to the release, Morgan Stanley and JP Morgan are TML's joint financial advisors, while BofA Securities India Ltd is representing TPG Rise Climate in this transaction.

TML's legal consultants for the deal are Khaitan & Co, Shardul Amarchand Mangaldas & Co, and Cleary Gottlieb. TPG Rise's legal advisors are Khaitan & Co, Shardul Amarchand Mangaldas & Co, and Cleary Gottlieb.

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