Mahindra Asset transfer agreement with Mahindra Electric Automobile
Mahindra & Mahindra has signed an Asset Transfer Agreement with Mahindra Electric Automobile Limited (MEAL) to transfer certain assets to the latter. The remaining assets will be transferred by June 30, 2026. The company stated that the Rs 1,925 crore investment in EVCo announced in July 2022 by British International Investment (BII), a business investment partner, would be made in two or more tranches.
An investment of up to Rs 1,200 crore will be made if certain conditions are met, and it is expected to be completed by March 31, 2024. The remaining investment of Rs 725 crore is contingent on meeting the milestones by July 1, 2024.
“The total Investment of the company in the said assets classified as capital work in progress as per the audited Financial Statements for the year ended 31st March, 2022 is approximately Rs 230 crore, which constitutes 0.6 per cent of the total net worth of the Company as of 31st March, 2022. Given that the identified assets are still under construction, the revenue generated by such assets for the fiscal year ending March 31, 2022.
MEAL was established on October 25, 2022 as a wholly owned subsidiary of Mahindra in India to pursue the 4-Wheel Passenger Electric Vehicles Business.
Mahindra Electric Automobile
British International Investment (BII) announced last year that it would invest Rs 1,925 crore in a four-wheel passenger electric vehicle company to be established by Mahindra & Mahindra. BII and Mahindra & Mahindra signed a binding agreement for an investment in a newly incorporated wholly-owned subsidiary of Mahindra.
The companies said in a statement that the Rs 1,925 crore investment will be in the form of compulsory convertible instruments with a valuation of up to Rs 70,070 crore, resulting in BII owning 2.75-4.76 percent of the EV company.
The EV startup will concentrate on four-wheeled electric vehicles. Between FY24 and FY27, the company’s total capital infusion is expected to be around Rs 8,000 crore.
The companies intend to bring in like-minded investors in the EV company in stages to meet the funding requirement. The BII investment is consistent with the government’s goal of hastening the availability and adoption of electric vehicles in the country.