Tata Motors will raise 100 million to expand its EV business.

Some of the world's largest names in private equity and sovereign wealth funds are interested in the stake sale.

Tata Motors has begun discussions with sovereign wealth funds and private equity investors about selling a share in its electric vehicle (EV) business to raise up to $1 billion.

The corporation intends to sell a major minority stake for approximately $10.5 billion.

Some of the world's largest names in private equity and sovereign wealth funds are interested in the stake sale, including KKR, General Atlantic, Abu Dhabi Investment Authority (ADIA), Mubadala Investment Company, Saudi Public Investment Fund, and Singapore's Temasek Holdings.

According to reports, Tata Motors intends to utilize the majority of the funds raised to pay down some of its outstanding debt, with the remainder being invested as primary stock in the EV business. The manufacturer has made no secret of its ambitious aspirations to extend its electric vehicle line by offering additional models at higher pricing points.

Tata and the Indian government

The Indian government has set a target of 30% electric car sales by 2030, up from 1% of total car sales of roughly 3 million per year currently. Tata Motors is well-positioned to benefit from this trend, having raised $1 billion in funding from TPG and ADQ for its EV operation, which is valued at $9 billion in 2021.

As if that wasn't enough, Tata Motors has agreed to supply 25,000 electric vehicles to ride-hailing giant Uber over the next three years. With all of these exciting advances, it's evident that Tata Motors is at the vanguard of India's electric vehicle revolution, and investors are keen to participate.

In both commercial and passenger vehicles, the brand has established a strong position in the electric vehicle market. Under the TPEML, the firm intends to develop a portfolio of ten electric vehicles in the following years. It also plans to improve charging infrastructure by collaborating with Tata Power.