M&M share surges over 5% as UK’s BII announces investment in new EV arm

Mahindra & Mahindra (M&M) shares touched a record high of Rs 1,191.90 after rallying more than 5% on the BSE during Friday’s intraday session. The move was made after the company announced that British International Investment (BII), the UK’s development financing institution, will invest Rs 1,925 crore in the company’s new four-wheeler electric passenger vehicle company.

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“BII and M&M have executed a binding agreement to invest up to Rs 1,925 crore each into a wholly-owned subsidiary of M&M that will be newly incorporated. BII will invest up to Rs 1,925 crore in the form of compulsory convertible instruments at a valuation of up to Rs 70,070 crore, resulting in 2.75 per cent to 4.76 per cent ownership for BII in the EV Co. The EV Co. will focus on four-wheel (4W) passenger electric vehicles,” M&M said in a notification on Thursday.

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For the proposed product portfolio, the total capital infusion for the EV Co. is expected to be around Rs 8,000 crores between FY24 and FY27. M&M and BII will collaborate to get more like-minded investors into the EV Co. in a staggered way to match the finance requirement. According to the company, the funds will be used largely to develop and sell a world-class electric SUV range with advanced technologies.

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M&M was trading 1.53% higher at Rs 1150.70 at 10:28 AM, compared to a 0.48% advance in the S&P BSE Sensex. On the BSE, the stock has increased by 48% since April.

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M&M is India’s largest tractor manufacturer (40% FY22 market share), second-largest commercial vehicle (CV) manufacturer, and fourth-largest passenger vehicle (PV) maker on a stand-alone basis. With a pipeline of attractive launches in the electric PV and LCV area, the company is steadily adapting in the face of changing technologies in the auto market. On August 15, 2022, it expects to present its born electric strategy.