TPG Rise to invest USD 1 bn in Tata Motors’ EV arm

Shares of Tata Motors on Wednesday jumped over 19 per cent after the company said it will raise USD 1 billion (Rs 7,500 crore) in its passenger electric vehicle (EV) business from TPG Rise Climate at a valuation of up to USD 9.1 billion.

The stock zoomed 19.29 per cent to its 52-week high of Rs 502 on BSE. It jumped 19.49 per cent to its 52-week high of Rs 502.90 on NSE. The fund will be used to partly fund investment of USD 2 billion (over Rs 16,000 crore) in the next five years by a new subsidiary of the company for expanding its EV business, including launching of 10 EV models.

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Tata Motors Ltd (TML) and TPG Rise Climate, the dedicated climate investing strategy of private investment firm TPG, have entered into a binding agreement, under which the latter along with its co-investor ADQ, will invest in a subsidiary of Tata Motors that will be newly incorporated, the company said in a statement on Tuesday.

TPG Rise Climate along with co-investors shall invest Rs 7,500 crore in compulsory convertible instruments to secure between 11-15 per cent stake in this company translating to an equity valuation of up to USD 9.1 billion, it added.

ADQ is a strategic partner of Abu Dhabi’s government and is one of the region’s largest holding companies with direct and indirect investments in more than 90 companies locally and internationally.