After Tata Motors, TVS Motor may raise money to run EV business

• TVS Motor is reportedly in talks with a clutch of global private equity investors to raise $300-500 million for its electric vehicle subsidiary.
• The two-wheeler automaker had recently announced its plans to create a wholly owned subsidiary for electric mobility business.
• Shares of TVS Motor have surged 40% in the last one month as investors are excited about the company’s growth plans in the EV space.

At present, Indian investors are very much excited about the emerging electric vehicle (EV) industry since one of the largest automakers Tata Motors expanded its EV business with a $1 billion investment from a US-based private equity firm.

Now another automaker reportedly in line to raise funds from global private equity investors for the EV business is south India-based two-wheeler maker TVS Motor. The company has garnered quite a lot of investors attention since it announced its plans to enter into the electric vehicle space.

On October 21, the two-wheeler automaker had announced the incorporation of a wholly owned subsidiary for electric mobility business.

The Economic Times report said that TVS Motor, India's third largest two-wheeler maker, is in talks with a clutch of global private equity investors to raise $300-500 million (₹2,220-3,700 crore) for its electric vehicle subsidiary at a valuation of $3.5-4 billion.

This report triggered the stock for good as it surged 9% in a single day on November 9. In the last one month, shares of TVS Motor have surged 40%.

Reportedly, TVS Motor currently sells around 500 EV units a month (5-month average) and has about 4% market share in EVs.

On October 13, private equity firm TPG’s Rise Climate Fund along with Abu Dhabi Development Holding announced an investment worth ₹7500 crore (around $1 billion at current prices) in Tata Motors’ electric vehicles (EV) segment.

Tata Motors’ stock has been on a rising spree in the last couple of months on its strong hold in the EV industry.

Companies involved into manufacturing of EV are flavour of the season

Currently, investors are rewarding companies involved in manufacturing EV business as the demand for electric vehicles is booming with the government’s efforts to focus on alternatives to fuel based vehicles.

On November 9, TVS Motor’s stock was the top gainer in the Nifty Auto index along with several auto component makers, whose stocks have also been rallying on involvement in the manufacturing of certain components for electric vehicles.

Auto companies	% return in 2021
Olectra Greentech	395%
Tata Power	215%
Tata Motors	175%
Minda Corporation	92%
Sona BLW Precisions	90%
Bharat Forge	53%
TVS Motor	51%
Motherson Sumi	45%

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