Investment of Rs 600 crores is aimed to help electrify India’s last-mile mobility and boost the penetration of electric three-wheelers
Global development institution IFC recently announced that it is going to invest Rs 600 crores in a new last mile mobility (LMM) company – a wholly owned subsidiary of Mahindra & Mahindra that will be newly incorporated (NewCo). Being seen as IFC’s first investment in an EV manufacturer in the country and the first in electric three-wheelers globally, it will be in the form of compulsory convertible instruments at a valuation of up to Rs 6,020 crores. It is further learnt that this Rs 600 crores investment will result in ownership of between 9.97% to 13.64% for IFC in NewCo. It must be noted that NewCo will house the last mile mobility division, including three-wheelers (Alfa, Treo, Zor) and four-wheeler SCV (Jeeto).
Delighted to have IFC as a partner in their last mile mobility journey, Anish Shah, MD and CEO, Mahindra & Mahindra, said, “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. With the electrification of the last mile mobility business at scale, we will move a step further in our commitment to being ‘Planet Positive’ by 2040. This also presents a tremendous opportunity for growth for micro and women entrepreneurs.”
IFC’s Regional Director for South Asia, Hector Gomez Ang 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. India is the largest three-wheeler market globally, and this investment marks a significant step towards scaled domestic production of electric vehicles catering to this segment, as well as small commercial vehicles. By supporting a leading market player, IFC hopes to encourage other large automotive manufacturers to follow suit, driving EV adoption across India and helping the government deliver on its climate targets.”
M&M believes that electric two- and three-wheelers can potentially lead the clean energy transition of the transport sector, especially in last-mile transportation. The official note expects the current investment to send a signal of confidence regarding the prospect of such vehicles in India, enabling improved connectivity and logistics for passengers and goods, creating green jobs and driving the Indian economy.
“The last mile mobility business presents a tremendous opportunity, both in terms of electrification and growth. Being the market leaders in this segment, we have an opportunity to drive higher EV penetration in this segment and provide a more sustainable as well as profitable option to microentrepreneurs. We are excited about leveraging the World Bank Group’s expertise in the EV sector to create a viable ecosystem with robust environmental and social practices, as well as build knowledge, innovation, and capacity,” remarked Rajesh Jejurikar, Executive Director and CEO (Auto & Farm Sector), Mahindra & Mahindra.
IFC’s Regional Industry Director for Manufacturing, Agribusiness and Services, Asia, Carsten Mueller commented, “Through this partnership with Mahindra & Mahindra, we aim to leverage private sector innovation and technology to accelerate the transition to EVs and help strengthen India’s e-mobility ecosystem. Green and sustainable transportation will be critical in the fight against climate change, and EVs provide exciting solutions to reduce greenhouse-gas emissions while curbing air and noise pollution and benefiting entrepreneurs and communities everywhere.”
World Bank Group member IFC identifies as the largest global development institution focused on the private sector in emerging markets and it works in over 100 countries.
Founded in 1945 and spread in over 100 countries, the Mahindra Group is one of the largest multinational federations of companies. It is a leader in sectors like farm equipment, utility vehicles, information technology and financial services in India and claims to be the world’s largest tractor company by volume.
