One More Tata Group Stock to Ride Gains in the EV Ecosystem

Before even the climate crisis took centre-stage, vehicle manufacturers were experimenting with electric vehicles (EVs).

In fact, the history of Indian EVs goes back to the 90s...

In 1996, Scooters India Pvt Ltd created Vikram SAFA, the first three-wheeler electric vehicle (EV). A total of 400 units were sold.

Following that, BHEL launched an 18-seater electric bus in 2000. Around 200 electric vans were also made in Delhi.

However, the popularity faded due to the high battery cost and poor performance.

As countries pledged to reduce dependency on fossil fuels and reduce carbon emissions, a new life was injected into the EV sector.

Now, the Indian EV market is surging. Government incentives are making EVs more affordable than ever, and the future looks bright for clean transportation in India.

India's ambitious EV30@30 target is a game-changer. By 2030, 30% of all new vehicle sales are expected to be electric.

With a projected CAGR of 49% and sales expected to reach 10 million units by 2030, India's EV market is expected to reach US$ 7 bn by 2025.

While all this happens, the formidable Tata Group wants to be as involved in taking a part in this revolution and high-growth market.

To capitalize on the surging demand for electric vehicles, Tata Motors already has a slew of new launches planned in the coming years.

The announcement of the possible IPO listing of Tata Passenger Electric Mobility Ltd (TPEM) has created even more market excitement.

Let's look at the significance of this IPO launch.

Tata Motors' Entry into the EV Market

Here is a glimpse of the aggressive expansion plans of Tata Motors, one of India's most loved automobile makers:

• In 2022 alone, the company churned out 10,000 electric vehicles from their Sanand factory, showcasing their established production capabilities.
• To fuel this growth, the company signed a massive deal to build a lithium-ion cell factory in Sanand. This ensured a steady supply of critical EV components and reduces dependence on external sources.
• This battery plant is slated to be operational within three years, further strengthening its grip on the EV production chain.
• With an initial capacity of 20 GWh, which is set to double in the future, this plant will be a powerhouse for EV battery production.
• Not to mention, they're already the undisputed leader in Indian EV manufacturing, holding a dominant market share.
• And they're not stopping there! In 2024, the company set its sights on launching staggering four new EV brands, further solidifying its position as a major EV player.
• To support this ambitious plan, the company is strategically transitioning nearly half their workforce towards EV manufacturing by 2027. This demonstrates their unwavering commitment to electric mobility.

About Tata Passenger Electric Mobility (TPEML)

In 2021, Tata Motors inaugurated a new subsidiary, Tata Passenger Electric Mobility (TPEML), for the sole purpose of manufacturing EVs. TPEML will hold 100% of the share capital in its EV unit and the initial capital allocated was Rs 7 bn.

Over the next five years, Tata Motors has plans to invest US$ 2 bn in this EV business.

In January 2023, TPEML acquired Ford India Private Limited's manufacturing plant in Sanand, Gujarat. The acquisition unlocked an additional state-of-the-art manufacturing capacity of 300,000 units per annum that can be scaled to 420,000.

Within the next 12 months, TPEML revamped the facility to roll out Tata cars from the manufacturing unit in January 2024.

TPEML has a robust pipeline of "New Forever" products that can set momentum in the electric vehicles space.

Currently, TPEML has launched two electric models - Nexon EV, Tiago EV, that are conquering Indian roads.

But that's not all. TPEML already boasts a staggering 80% market share in the Indian EV market.

TPEML IPO Sneak Peek

The IPO of Tata Passenger (TPEML)is expected to be a game-changer and could be valued between US$1-2 bn.

This isn't just about raising capital. It's a strategic move to capitalise on the phenomenal growth of the Indian EV market.

The IPO window is expected to open within the next 12-18 months.

A Look at its Financials...

TPEM is already valued at a staggering US$ 9.5-10 billion.

As of March 2023, the company's total revenue from operations stood at Rs 419.8 million (m) and if you add the other income, the total income comes to Rs 2,759.9 m.

Profit for the same year stood at Rs 530 m.

A company established 3 years ago is already raking up profits with more plans for strategic expansions.

The infrastructure, technology, and manpower are already available with Tata Motors.

The infusion of more staff into the newest TPEML manufacturing unit will only help to scale up the production.

Outlook for TPEM

TPEML has already sold 53,000+ electric cars in 2024 so far. This is a 69% YoY increase in EV sales, including exports.

As per recent reports, the company expects to sell 100,000 more in 2025.

The Tata group is keen on passing on the benefits to the customers.

The reduction in battery prices has encouraged the company to slash down the prices to boost faster adoption.

The Nexon EV can now be purchased for Rs 1.4 m, and the Tiago EV is much cheaper, priced at Rs 0.8 m.

They already hold over 75% market share in India's domestic EV market.

In the next 3-4 years, the company plans to launch 10 new electric cars, further solidifying their position as a major EV player.

The recent price reduction on existing models shows its dedication to bringing EVs to the mainstream. This is great news for both consumers and investors, as it broadens the market potential.

TPEM isn't just about dominating the mainstream EV market - they're also setting their sights on the luxury segment.

Tata Passenger Electric Mobility Ltd (TPEM) has joined forces with Jaguar Land Rover (JLR), another Tata subsidiary known for its luxurious vehicles.

This powerhouse partnership is creating a premium electric vehicle series called Avinya.

Built on the state-of-the-art Electrified Modular Architecture (EMA) platform, it promises next-generation connectivity, performance, advanced driver-assistance systems (ADAS), refinement, and top-notch safety.

Avinya is set to hit the roads in 2025, making TPEM a frontrunner in the premium EV race.

In Conclusion

Tata Passenger Electric Mobility (TPEM) is positioned for explosive growth in India's booming electric vehicle (EV) market.

The company is about to unleash a wave of innovation with five new EVs built on their cutting-edge acti.ev architecture.

This versatile platform promises a range of 300 km to 600 km on a single charge and blazing-fast charging speeds.

The first launch will be the electric version of its famous compact SUV Punch.

No one expects a lacklustre IPO debut from any Tata Group company, especially in the burgeoning EV sector in India.

It does seem like the IPO rush is just getting started and the Tata group company may be at the right place at the right time, looking to launch its IPO soon.

In fact, reports suggest that the group is preparing for as many as five upcoming IPOs by 2025.

While we still don't know the launch dates or their offer prices for that matter, the Tata group has along history of rewarding shareholders and being committed to their growth plans.

Watch out for this space as we bring the latest details about the upcoming TPEML IPO.

Until then, Happy Investing!

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