Indian auto giant Mahindra & Mahindra informed exchanges on February 21 that British International Investment (BII) will invest Rs 1,925 crore ($250 million) in a new four-wheel electric passenger vehicle company. The BII is the UK Government’s development finance institution.

The investment, worth Rs 70,070 crore ($9.1 billion), will be done in cash in two tranches. The first tranche will be up to Rs 1,200 crore, and the second tranche will be up to Rs 725 crore, subject to certain milestones reached by the two companies, the release added.

It said M&M would invest the same amount in the newly spun-off subsidiary. The first tranche is expected to close by June 30, 2023, and the second tranche by fiscal 2024, depending on milestones.

The partnership will “accelerate the growth of the four-wheel electric passenger vehicle business and gain access to growth capital to fund the business” and “significantly leverage manufacturing capabilities and product development of M&M and ecosystem of suppliers, dealers and financiers system,” it said.

It added that the capital injected by BII and M&M would be used to “create and sell a world-class portfolio of electric SUVs with advanced technology”.

BII’s investment will give it a 2.75-4.76% stake in the new EV company on a fully diluted basis, with a nominal shareholding of 100 equity shares. M&M will hold 100% of the company’s equity in the arm.