IFC to Invest INR 600 Cr. in Mahindra's LMM Company to Boost Small Trader's Income

In a bid to scale up electric three-wheelers and small commercial vehicles (SCVs) that are more affordable, IFC is investing INR 600 crores in a new last mile mobility (LMM) company - a wholly owned subsidiary of Mahindra & Mahindra that will be newly incorporated (NewCo).

A gamechanger for microentrepreneurs in India, the funding will transform lives by boosting their income and paving the way for the auto industry's seamless shift from fossil fuel to electric vehicles (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 INR 6,020 crores. The INR 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 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.

Electric vehicles enable vibration and noise free operations, generate higher earnings for drivers and enable microentrepreneurship. The business will further generate employment for women, driving equality and inclusion while bolstering India's climate action agenda.

Anish Shah, MD & CEO, Mahindra & Mahindra, said, "We are delighted to have IFC as a partner in our last mile mobility journey. 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."

"With transport being the fastest-growing contributor to climate change, it is no longer a question of whether electric vehicles should be adopted at scale, but rather how quickly," said Hector Gomez Ang, IFC's Regional Director for South Asia. "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."