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Global development institution IFC will invest Rs 600 crore in a new last-mile mobility (LMM) company, a wholly-owned subsidiary of Mahindra & Mahindra that will be newly incorporated (NewCo), it announced on Wednesday.

IFC's first investment in an EV manufacturer in the country, and the first in electric three-wheelers globally, will be in the form of compulsory convertible instruments at a valuation of up to Rs 6,020 crore.

The Rs 600 crore investment will result in an ownership of between 9.97 per cent to 13.64 per cent for IFC in NewCo.

NewCo will house the last mile mobility division, including three wheelers (Alfa, Treo, Zor) and four-wheeler SCV (Jeeto).

"With the electrification of the last mile mobility business at scale, we will move a step further in our commitment to be aPlanet Positive' by 2040. This also presents a tremendous opportunity for growth for micro and women entrepreneurs," said Anish Shah, MD and CEO, Mahindra & Mahindra.

India has committed to reducing its emissions profile by 45 per cent by 2030, and simultaneously aims to achieve 80 per cent EV penetration for two-and three-wheelers, 70 per cent for commercial vehicles and 30 per cent for private cars in the same time-frame.

"India is the largest three-wheeler market globally, and this investment marks a significant step towards scaled domestic production of electric vehicles catering to this segment, as well as small commercial vehicles," said Hector Gomez Ang, IFC's Regional Director for South Asia.

According to Rajesh Jejurikar, Executive Director and CEO (auto and farm sector), Mahindra & Mahindra, being the market leaders in this segment: "We have an opportunity to drive higher EV penetration in this segment and provide a more sustainable as well as profitable option to microentrepreneurs".

IFC, a member of the World Bank Group, works in more than 100 countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries.