IFC invests Rs 600 cr in Mahindra & Mahindra’s new last-mile EV business

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Global development institution IFC will invest Rs 600 crore in a new last-mile mobility (LMM) company, a wholly owned subsidiary of Mahindra & Mahindra to be newly incorporated (NewCo), it announced on Wednesday.

IFC’s first investment in an EV manufacturer in the country, and the first in electric tricycles globally, will be in the form of mandatory convertibles valued at up to Rs 6,020 crore.

The Rs 600 crore investment will result in an ownership of between 9.97 percent and 13.64 percent for IFC in NewCo.

NewCo will house the last mile mobility division, including three-wheelers (Alfa, Treo, Zor) and four-wheeler SCV (Jeeto).

“With the electrification of the last mile mobility business at scale, we will take a step further in our aim to be aPlanet Positive by 2040. This also presents a great opportunity for growth for micro and female entrepreneurs,” said Anish Shah , MD and CEO, Mahindra & Mahindra.

India has committed to reducing its emissions profile by 45 percent by 2030 while aiming to achieve an electric car penetration of 80 percent for two- and three-wheelers, 70 percent for commercial vehicles and 30 percent for passenger cars in the same time-frame.

“India is the largest three-wheeler market in the world and this investment is an important step towards large-scale domestic production of electric vehicles for this segment, as well as small commercial vehicles,” said Hector Gomez Ang, IFC’s Regional Director for South Asia.

According to Rajesh Jejurikar, Executive Director and CEO (Automotive and Agriculture Sector), Mahindra & Mahindra, the market leaders in this segment, “We have an opportunity to drive higher EV penetration in this segment and provide a more sustainable and profitable option for micro-entrepreneurs”.

IFC, a member of the World Bank Group, works in more than 100 countries. In fiscal year 2022, IFC pledged a record $32.8 billion to private companies and financial institutions in developing countries.

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