TPG Group to secure 11-15 percent stake in Tata Motor's EV subsidiary

Tata Motors Ltd (TML) announced on Tuesday that it has entered into a legal agreement with private equity investor TPG Rise Climate and co-investor ADQ to invest Rs 7,500 crore in a Tata Motors subsidiary that will be newly incorporated to manage the company's electric vehicles (EV) business.

TPG Rise Climate and co-investors would invest Rs 7,500 crore in mandatory convertible instruments to obtain an 11 percent to 15 percent interest in the firm, valuing it at up to 9.1 billion US dollars in equity.

The new company will make use of all of Tata Motors Ltd's existing investments and skills, channelling future investments into electric cars, dedicated BEV platforms, innovative automotive technologies and catalysing investments in charging infrastructure and battery technology. Over the next five years, this firm will develop a portfolio of ten electric vehicles and, in collaboration with Tata Power Ltd, catalyse the development of a broad charging infrastructure to help India's rapid adoption of electric vehicles.

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 delights 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 percent electric vehicles penetration rate by 2030."

The first round of capital injection is anticipated to be finished by March 22, with the remaining monies injected by the end of 2022. TML's financial advisers are Morgan Stanley and JP Morgan, while TPG Rise Climate is represented by BofA Securities India Ltd in this transaction.

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."

TML's legal advisers 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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