Tata Motors has revealed its plans to sell its 9.9% stake in Tata Technologies Limited (TTL) for a total consideration of ₹1,614 crore. The decision to sell the stake comes as Tata Motors aims to further its de-leveraging agenda, and the deal is expected to close within the next two weeks upon the completion of customary closing procedures.
The share purchase agreements for this transaction include TPG Rise Climate as the lead investor, attributing an equity valuation of ₹16,300 crore to Tata Technologies Limited. TPG Rise Climate is part of TPG’s global impact investing platform and focuses on climate-related investments, particularly in areas such as energy transition, green mobility, sustainable fuels, sustainable molecules, and carbon solutions.
As part of the sale, Tata will receive ₹1,467 crore in consideration for selling its 9.0% stake in TTL to TPG Rise Climate SF Pte. Ltd., a climate-focused private equity fund. An additional ₹146.7 crore will be received by Tata Motors for selling its 0.9% stake in TTL to the Ratan Tata Endowment Foundation.
This transaction follows TPG Rise Climate’s earlier investment of $1.0 billion in Tata Passenger Electric Mobility Limited. TPG Rise Climate serves as a strategic partner in Tata Motors’ efforts to develop an influential electric passenger mobility business in India, focusing on creating a significant impact on the market.
Tata Technologies Limited is a key subsidiary of Tata, specializing in engineering and product lifecycle management software. The stake sale serves as a strategic move to align Tata Motors with its objectives and ongoing transformation, particularly in the electric vehicle segment. The sale not only provides financial resources for Tata Motors but also positions Tata Technologies for continued growth and expansion within its industry.
The expected date of completion for the sale is October 27, 2023, although this date may be mutually extended by the parties involved. Tata’s decision to part ways with a significant stake in Tata Technologies underscores the company’s commitment to its strategic vision and ongoing endeavors in the evolving automotive landscape.
