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The International Finance Corporation (IFC) has introduced to invest ₹600 crore in a new last mile mobility (LMM) company ¬ a completely owned subsidiary of Mahindra & Mahindra that will likely be newly integrated (NewCo).
A gamechanger for microentrepreneurs in India, the funding is aimed toward remodeling the lives of micro entrepreneurs, working electrical three wheelers & small business automobiles, by boosting their earnings and paving the way in which for the auto business’s shift from fossil gas to electrical automobiles (EVs).
“IFC’s first investment in an EV manufacturer in the country and the first in electric three-wheelers globally will be in the form of compulsory convertible instruments at a valuation of up to ₹6,020 crore.” IFC and M&M mentioned in a joint assertion.
The ₹600 crore funding will consequence in an possession of between 9.97% to 13.64% for IFC in the NewCo.
The NewCo will home the last mile mobility division, together with three wheelers (Alfa, Treo, Zor) and four-wheeler SCV (Jeeto).
“IFC’s financing will help scale up electric mobility in last mile connectivity – passenger and cargo segments – while enabling the development and manufacturing of new generation products in this space,” the joint assertion mentioned.
Anish Shah, MD & CEO, M&M mentioned, “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 mentioned, “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,” he added.
Rajesh Jejurikar, Executive Director and CEO (Auto & Farm Sector), M&M, mentioned, “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.”
