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24 Feb 2023
Automobile

Tata Motors Talking to Investors to Fund raise in Ev Business

By News Date 24 Feb 2023

Tata Motors Talking to Investors to Fund raise in Ev Business

Tata Motors is planning to raise $1 billion through this equity sale and will use this proceeds to retire a part of its outstanding debt, according to the report.

Tata Motors has started talks with sovereign wealth funds and some private equity investors like UAE-based Abu Dhabi Investment Authority (ADIA) and Mubadala Investment Company, to sell a significant minority in the Electric Division of the company. The brand is planning to raise an amount of $1 Billion by this equity sale. And will use most part of this proceeds to cover up its outstanding debt, according to the reports. 

Last Valuation of Tata Motors EV Arm:-

Currently the Electric Division of the company stands at a valuation of $10.5 billion which is 15% higher than the last round valuation of $9.1 billion, said by a person aware of this discussion. This is the second round of funding for the EV arm of the company which is housed under the Tata Passenger Electric Mobility Limited (TPEML), after they secured the deal of which is signed in 2021 from TPG Rise Climate and ADQ which was worth $1 Billion. The investors were given compulsory convertible instruments to secure between 11% and 15% stakes of the company. The capital which was raised in the first round was used for the investments in developing technology and manufacturing expertise in the EV segment. 

The brand has taken a good lead in the electric vehicle market in both commercial and passenger vehicles. In the coming years the company is planning to create a portfolio of 10 Electric Vehicles under the TPEML. Also, it is looking forward to upgrading the charging infrastructure by associating with Tata Power. 

Tata Motors Talking to Investors to Sell Stakes in the EV Business 

According to the report, Tata Motors is planning to raise $1 billion through this equity sale and will use this proceeds to retire a part of its outstanding debt.

Tata Motors has started talks with sovereign wealth funds and some private equity investors, like UAE-based Abu Dhabi Investment Authority (ADIA) and Mubadala Investment Company, to sell a significant minority in the Electric Division of the company. The brand is planning to raise $1 Billion with this equity sale. And will use most of this proceeds to cover up its outstanding debt, according to the reports. 

Last Valuation of Tata Motors EV Arm:-

Currently, the Electric Division of the company stands at a valuation of $10.5 billion. It is 15% higher than the last round valuation of $9.1 billion, said a person aware of this discussion. This is the second round of funding for the EV arm of the company, which is housed under the Tata Passenger Electric Mobility Limited (TPEML) after they secured the deal signed in 2021 from TPG Rise Climate and ADQ, which was worth $1 Billion. The investors were given compulsory convertible instruments to secure between 11% and 15% stakes in the company. The capital of the first round comes into use for investments in developing technology and manufacturing expertise in the EV segment. 

The brand has taken a good lead in the electric vehicle market in both commercial and passenger vehicles. In the coming four years, the company plans to create a portfolio of 10 Electric Vehicles under the TPEML. Also, it is looking forward to upgrading the charging infrastructure by associating with Tata Power. 

The latest fundraising round occurred when the company was likely to miss their target of becoming a zero net-debt company at a consolidated level by FY '24. In a recent earnings call, it said that for its business in India, it would meet its zero net-debt targets. But, in the case of its subsidiary firm Jaguar Land Rover (JLR), the same target is not possible immediately. 

The company is our country's biggest automaker brand and had a debt of about Rs. 12,400 crores as of the 31st of December on the business in India. It includes commercial, passenger and Evs. Also, the company's overall debt, including the British subsidiary JLR, is Rs. 57,500 Crore. 

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