Makers of best sellers such as Nexon.ev and Tiago.ev, India’s largest electric vehicles manufacturer, Tata Passenger Electric Mobility Limited (TPEML) is set to be the next big listing opportunity for the Tata Group.

According to multiple sources including investment bankers aware of the matter, the group is aiming at $1–2 billion of initial public offering for its electric vehicles business.

Big bang listing

Housed as a subsidiary of Tata Motors, the company closed $1 billion round of funding from US private equity major TPG in January 2023. The fundraise was as part of the company’s plans to infuse $2 billion of funding by 2026. While the initial public offering (IPO) may also help the company in its fundraising plans, sources say listing has more to do with the group’s overall strategy on investment monetisation.

“Listing of TPEML is to ensure that the Tata Group is able to monetise its investments in the electric vehicles business rather than to garner funds from the market,” said a banker with knowledge of the development. Adding that the group isn’t working with any finite cut-off date for listing its EV business, the internal expectation is that if the business climate for electric vehicles remains robust and the overall stock market sentiments is positive, the group may aim at listing the EV business in the next 12–18 months, that is in FY25 or latest by FY26.

Presently, the group has committed to investing $1 billion in TPEML through internal accruals and sources say this plan is well on track.

When contacted, official spokesperson of Tata Motors dismissed the development as rumours “and that as a policy it (the company) doesn’t comment on speculation”. The spokesperson also added that in December FY24 quarter call with media the company has stated that it had no plans for raising funds.

About Tata EV

Incorporated in 2021, Tata Passenger Electric Mobility Limited is among the newest business additions at the Tata Group and the first to be substantially backed by private equity investments. With over 53,000 electric cars sold so far in FY24 and 73 per cent market share in the electric vehicles space, TPEML holds a leadership position in its segment.

According to reports, TPEML’s valuations are pegged at $9.5–10 billion.  Accounting for 12 per cent of Tata Motors’ passenger vehicles portfolio, the EV business is just shade away from overtaking the Tata Motors’ diesel vehicles unit.

What’s the big deal?

Tatas aim at listing its electric vehicles biz in 12–18 months

Tata Passenger Electric Mobility is a market leader in EVs and among the youngest subsidiaries of the group

EV biz to aim at $1–2 billion of IPO

Listing part of group’s value monetisation plan

Valuation of TPEML pegged at $9.5–10 billion

Company closed $1 billion round of funding from TPG in January 2023

Plans to raise $2 billion by 2026.

Sold 53,000 electric cars sold so far in FY24 holds 73 per cent market share among EVs