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Singapore investment firm Temasek will take up to a 3% stake in Mahindra and Mahindra's electric vehicle unit at a valuation of up to $9.8 billion, the Indian automaker said on Thursday.

Temasek will invest 12 billion rupees ($145.02 million) as compulsorily convertible preference shares, giving the investor a 1.49%-2.97% stake in Mahindra Electric Automobile Ltd, the automaker said in a regulatory filing.

With Temasek, the automaker has brought onboard a "marquee investor" with strong governance. It will also help Mahindra Group strengthen its global strategic partnerships.

Mahindra had been in talks with global investors, including green funds and private equity players for nearly a year to raise between $250 million and $500 million to accelerate its EV plans, Reuters has reported.

Mahindra raised the first round of money for its EV business from British International Investment (BII), which has committed to investing in tranches of up to $250 million at a valuation of $9.1 billion.