IFC to invest Rs 600 crore in Mahindra’s new last mile mobility company

International Finance Corporation (IFC), a member of the World Bank Group, will invest Rs 600 crore in Mahindra and Mahindra’s wholly-owned subsidiary, a newly incorporated last mile mobility company. The investment comes as IFC aims to scale up affordable electric three-wheelers and small commercial vehicles.

IFC focuses on the private sector in emerging markets to create markets and opportunities in developing countries. The investment will boost income of microentrepreneurs in India and pave the way for the seamless shift from fossil fuel to electric vehicles in the auto industry.

The investment will be in the form of compulsory convertible instruments at a valuation of up to Rs 6,020 crore. The investment will result in an ownership of between 9.97-13.64 per cent for IFC in Mahindra’s NewCo.

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

IFC’s investment will enable the development and manufacturing of new generation products in the electric mobility space, thereby helping scale up e-mobility in last mile connectivity.

Anish Shah, MD & CEO, Mahindra & Mahindra, said, “We are delighted to have IFC as a partner in our last mile mobility journey. Decarbonizing the transport sector is crucial to achieving the climate goals that India has set for herself. IFC, with its focus on sustainability and boosting prosperity, is an ideal partner for us.”

Hector Gomez Ang, IFC’s Regional Director for South Asia said, “With transport being the fastest-growing contributor to climate change, it is no longer a question of whether electric vehicles should be adopted at scale, but rather how quickly.”

The companies said in a joint statement that decarbonising the transport sector that contributes about 13 per cent of the country’s greenhouse-gas emissions can reduce the impacts related to GHG emissions. They said that while growing e-commerce activity and urbanisation can drive an increase in last mile transportation, electric vehicles and lead the sector’s clean energy transition.

IFC that works in over 100 countries, committed a record $32.8 billion to private companies and financial institutions in developing countries in fiscal year 2033.

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