Tata Motors Ltd (TML) has entered into share purchase agreements to sell 9.9% stake in IPO-bound Tata Technologies Ltd (TTL) for Rs 1,613.7 crore to private equity fund TPG Rise Climate SF and an endowment trust belonging to Tata Trusts Chairman Ratan Tata. TPG Rise Climate is the lead investor for this transaction, which ascribes an equity valuation of Rs 16,300 crore for TTL.
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“TTL, a subsidiary of TML, is a leading global engineering services company offering product development and digital solutions to global original equipment manufacturers. TTL has deep domain expertise in the automotive industry and leverages this expertise to serve clients in adjacent industries, such as in aerospace, transportation and construction heavy machinery. TTL’s deep manufacturing domain knowledge and globally distributed service delivery capability helps it deliver value-added services to its clients,” said Tata Motors in a stock exchange filing on Friday.
TPG Rise Climate is the dedicated climate investing arm of TPG’s $18 billion global impact investing platform. The fund focuses on five climate sub-sectors: energy transition, green mobility, sustainable fuels, sustainable molecules, and carbon solutions.
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This transaction furthers TML’s de-leveraging agenda and is expected to close in the next two weeks on completion of customary closing procedures, said the Tata firm,
“TPG Rise Climate had earlier invested $1 billion in Tata Passenger Electric Mobility Limited and is a strategic partner in TML’s journey to create a market-shaping electric passenger mobility business in India,” said Tata Motors.
“Tata Motors Limited and TPG Rise Climate SF Pte. Ltd, a climate focused private equity fund, has entered into a Share Purchase Agreement on 13th October, 2023 for purchasing 9% stake in Tata Technologies Limited. Tata Motors Limited and Ratan Tata Endowment Foundation, a Section 8 company, has entered into a Share Purchase Agreement on 13th October, 2023 for purchasing 0.9% stake in Tata Technologies Limited,” said Tata Motors in a stock exchange filing.
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Transaction to be completed by October 27, 2023 or such other date as may be mutually extended by the parties, said Tata Motors.
An amount of Rs 1,467 crore will be received by the Company as consideration for sale of its 9% stake in TTL to TPG Rise Climate. An amount of Rs 146.7 crore will be received by the Company as consideration for sale of its 0.9% stake in TTL to Ratan Tata Endowment Foundation.
As of March 31, 2023, Tata Technologies’ income from operations was Rs 4,414 crore and net worth was Rs 2,989 crore.
