IFC to invest ₹600 cr in new last mile mobility company of Mahindra Group

World Bank arm IFC has decided to invest ₹600 crore in Mahindra Group's last-mile electric mobility business to scale up electric three-wheelers and small commercial vehicles that are more affordable.

In a stock exchange filing, Mahindra Group said that IFC would be investing RS 600 crore in NewCo, the new subsidiary of Mahindra Group.

This would be IFC's first investment in an EV manufacturer and its first in electric three-wheelers globally, in the form of compulsory convertible instruments at a valuation of up to ₹6,020 crore.

According to the automaker, the ₹600 crore investment will result in ownership of between 9.97% to 13.64% for IFC in NewCo.

"Decarbonising 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," Mahindra & Mahindra MD and CEO Anish Shah said.

IFC's Regional Director for South Asia Hector Gomez Ang said 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.

Decarbonising the transport sector, which contributes about 13%. 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% by 2030. Mahindra & Mahindra Executive Director and CEO (Auto & Farm Sector) Rajesh Jejurikar noted that the last-mile mobility business presents a tremendous opportunity, both in terms of electrification and growth.