Mahindra Plans Listing Of Electric Vehicle Arm Within FY28–30

Mahindra Electric Automobile Ltd., the electric vehicle subsidiary of the Mahindra Group, is expected to list between FY28 and FY30. Mahindra has committed an investment of Rs 12,000 crore in MEAL over the next three years to expand its four-wheeled passenger EV portfolio.

By 2027, the company anticipates that 20% to 30% of its SUV sales will come from electric vehicles. The entire funding will be met through cash generated from operations. So far, Mahindra has invested Rs 5,454.5 crore, including an additional Rs 2,255 crore in the last financial year.

In the past two years, Mahindra has brought in strategic investors — British International Investment Plc. and Jongsong Investments Pte., an arm of Temasek — raising a total of Rs 3,050 crore through compulsorily convertible preference shares. The company does not plan to raise any further external capital.

On conversion of these CCPS, BII will hold a stake ranging from 2.64% to 4.58%, while Temasek's stake will range from 1.49% to 2.97% in MEAL.

During the year, BII's shareholder agreement was restated, and BII has revised the value of its CCPS investment, now valuing MEAL between Rs 40,393 crore and Rs 70,075.7 crore. Temasek's investment pegs MEAL's valuation in a similar range — between Rs 40,400 crore and Rs 80,536 crore.

Both investors have early conversion rights and Mahindra is obligated to provide BII and Temasek a complete exit between Nov. 1, 2027, and Nov. 1, 2030, through a listing or other options.

If Mahindra fails to provide BII an exit by Nov. 1, 2030, BII will have the right to a full exit at the higher of fair market value or its total invested amount, to be facilitated by Mahindra, its affiliates or a third party.

If Mahindra cannot provide Temasek an exit by Nov. 1, 2030, Temasek will have the right until Oct. 31, 2031, to demand a full exit through a share swap if the fair market value of its stake is higher than its invested amount. Alternatively, Mahindra may, at its sole discretion, provide a cash exit at the higher of the fair market value or the amount invested by Temasek. If the fair market value is lower than Temasek's investment, neither Mahindra nor Temasek will be obligated to complete the share swap.

For FY25, Mahindra Electric Automobiles reported a revenue of Rs 2,264 crore and a net loss of Rs 210.3 crore.