IFC is investing Rs 600 crore in a new last mile mobility (LMM) which is a wholly-owned subsidiary of Mahindra & Mahindra that will be newly incorporated (“NewCo”). The investment aims to scale up electric three-wheelers and small commercial vehicles (SCVs).
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 Rs 6,020 crores. The Rs 600 crores investment will result in an ownership of between 9.97% to 13.64% for IFC in NewCo.
NewCo will house the last mile mobility division, including three-wheelers – Alfa, Treo, Zor and four-wheeler SCV -Jeeto. IFC’s financing is likely to l help scale up electric mobility in last-mile connectivity – passenger and cargo segments.
Anish Shah, MD & 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 be ‘Planet Positive’ by 2040. This also presents a tremendous opportunity for growth for micro and women entrepreneurs.”
Decarbonizing the transport sector, which contributes about 13 percent of the country’s greenhouse gas (GHG) emissions, can help substantially reduce the impacts related to GHG emissions and other air pollutants. This is vital given that India has committed to reducing its emissions profile by 45 percent by 2030, and simultaneously aims to achieve 80 percent EV penetration for two-and three-wheelers, 70 percent for commercial vehicles, and 30 percent for private cars.