Mahindra & Mahindra is looking to attract private equity (PE) funding for its decade-old electric vehicle business. This is part of the company’s newly announced strategy of looking at fewer businesses which would be profitable in the long run. It marks a sharp shift in the company’s strategy given that just six months ago it was open to a large stake sale, said a person in the know of the development. With the pandemic having caused havoc, especially in the automotive industry, the company feels it better to stay fully invested in its electric vehicle business rather than ceding space to a new player, especially as the government remains bullish on this sector, said the person.

Mahindra & Mahindra’s managing director, Pawan Goenka, said while the company would not sell a stake in Mahindra Electric or monetise its assets, the company is open to funding coming in via private equity or similar investors. Mahindra Electric, India’s largest electric vehicle maker by sales, is exploring fresh investments and partnerships to develop electric vehicles, especially power trains.

Banking executives told ET that the quantum of PE sourcing may go up to $100 million (about Rs 760 crore) over a two-three year period. The company’s CEO, Mahesh Babu, said: ‘We will not be able to talk on the names of the PE funds with whom we are discussing at this stage.’ Earlier, the company was looking at a potential stake sale in its EV business and was understood to have been in talks with Japan’s Softbank for a strategic investment, which could have also included a minority stake in the EV business. Softbank has a subsidiary mobility business, SB Energy Corp, which combines renewable energy with EV battery cells with its investments in Ola Electric.

‘The EV business will drain capital for R&D, power train and to build the entire EV ecosystem, as it is very capital intensive, Hence the need for PE investments,’ a banker said on condition of anonymity.

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