Tata Motors is in talks with sovereign wealth funds and private equity investors to raise up to $1 billion via a stake sale in its electric vehicle (EV) business, the Economic Times (ET) reported on Thursday. Citing a source, the report said that the company plans to sell a significant minority stake.
Tata Motors is looking at a valuation of about $10.5 billion, the report said. The investors include the UAE-based Abu Dhabi Investment Authority (ADIA) and Mubadala Investment Company, the Saudi Arabia-headquartered Public Investment Fund, Singapore’s Temasek Holdings, and KKR and General Atlantic.
The majority of the funding will be used by Tata Motors to pay off some of its debt, while a minor fraction will be invested as primary stock in the EV industry, the report said.
Uber Technologies announced earlier this week that it intends to introduce 25,000 EVs over the course of three years in India and that it will purchase cars from Tata Motors, the country’s largest EV manufacturer.
According to a Reuters report, Tata Motors also intends to increase the pricing points and add more models to its electric car lineup.
Only 1 per cent of the approximately 3 million cars sold in India each year are EVs. The country’s auto market is minuscule in comparison to its population, according to the news agency. By 2030, the government hopes to increase this to 30 per cent.
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Tata Motors pledged to invest more than $2 billion in its EV business over the course of five years when it raised $1 billion from TPG and Abu Dhabi state holding company ADQ in 2021 for its EV operation at a $9 billion value, the report said.