According to media reports, Tata Motors has started discussions with sovereign wealth funds and private equity investors to raise up to $1 billion through a stake sale in its electric vehicle (EV) business.
The company plans to sell a significant minority stake eyeing a valuation of about $10.5 billion.
The funds and investors include Temasek Holdings of Singapore, Abu Dhabi Investment Authority (ADIA) and Mubadala Investment Company of the United Arab Emirates, Public Investment Fund of Saudi Arabia, and KKR and General Atlantic.
Tata Motors plans to use the bulk of the proceeds to retire a part of its outstanding debt and infuse a small portion as primary equity in the EV business, the report said.
Earlier this week, Uber Technologies said it plans to introduce 25,000 EVs over three years in India and will buy vehicles from Tata Motors. With only 1% of the approximately 3 million cars sold in India each year being electric versions, the country's auto market is minuscule in comparison to its population. By 2030, the Indian government hopes to increase this to 30%.
In 2021, Tata Motors raised $1 billion from TPG and Abu Dhabi state holding company, ADQ, for its EV unit at a $9 billion valuation, pledging to invest more than $2 billion in its EV business over five years.