TPG Rise will invest Rs 7,500 crore in the Tata group company Tata Motors’ electric vehicle company. Tata Motors is forming a separate company for electric vehicles. This investment will come in this company.
Share price reached Rs 420
Shares of Tata Motors hit a one-year high on Tuesday. It closed at Rs 420. However, it had gained 8% on Monday. A month ago the share price was Rs 293, which has now increased by 40%. The stock has gained 24% in just three days.
stock exchange information
Tata Motors has given this information to the stock exchange. The company said that its board has approved the proposal of TPG Rise. Tata Motors will form a new company for electric vehicles. This company will look after the electric business in India. Tata can compete with Tesla in electric vehicles. Tesla is coming with an aggressive plan in India.
Shares to be issued to TPG
Tata Motors said the new company will issue 50 million A-1 compulsory convertible preferences shares. Whereas 2.5 crore A-2 will issue Compulsory Convertible Preference Shares. Both these shares will be issued to TPG. In lieu of this, TPG will invest Rs 7,500 crore.
TPG Rise can take 11 to 15% share
Through this convertible share, TPG Rise will take 11 to 15% share in the newly formed company. The equity valuation of the new company will be $9.1 billion. TPG Rise will infuse this money in the Tata Electrical Vehicle Company over the next 18 months. When Tata Motors becomes an electric company, Tata Motors and TPG will make a Rise Shareholders Agreement. It will contain the terms and conditions regarding the proposed transaction.
Chairman happy with investment proposal
Tata Motors Chairman N. Chandrasekaran said that we are happy with this investment proposal of TPG Rise. Through this, we will create a good market in the electric passenger mobility business. We will continue to invest in electric vehicles. TPG Rise may complete the first phase of investment in Tata Motors’ electric vehicle company by March 2022. Whereas she can invest the entire money by the end of 2022. Morgan Stanley and JP Morgan are the joint financial advisors for this deal of Tata Motors.