Makers of best sellers such as Nexon.ev and Tiago.ev, Tata Passenger Electric Mobility Ltd (TPEML) – India’s largest electric vehicles manufacturer – is set to be the next big listing opportunity for the Tata Group.

According to multiple sources including investment bankers, the group is aiming at a $1–2 billion initial public offering (IPO) for its electric vehicles business.

Housed as a subsidiary of Tata Motors, the company closed a $1-billion funding round with investment from US private equity major TPG in January 2023. The fundraise was part of the company’s plans to infuse $2 billion by 2026.

“The listing of TPEML is to ensure that the Tata Group is able to monetise its investments in the electric vehicles business rather than to garner funds from the market,” said a banker with knowledge of the development.

He added that though the group isn’t working with any fixed cut-off date for listing its EV business, the internal expectation is that if the business climate for electric vehicles remains robust and the overall stock market sentiments are positive, the listing may happen in the next 12–18 months i.e., in FY25 or latest by FY26.

Presently, the group has committed to investing $1 billion in TPEML through internal accruals, and sources say this plan is well on track.

When contacted, an official spokesperson of Tata Motors dismissed the development as rumours and said “ as a policy, the company doesn’t comment on speculation”.

The spokesperson added that in the December quarter (FY24) call with the media, the company had stated that it had no plans for raising funds.

Incorporated in 2021, TPEML is among the newest additions to the Tata Group and the first business to be substantially backed by private equity investments.

With over 53,000 electric cars sold so far in FY24 and 73 per cent market share in the electric vehicles space, TPEML holds a leadership position in its segment.

According to reports, the company’s valuations are pegged at $9.5–10 billion. Accounting for 12 per cent of Tata Motors’ passenger vehicles portfolio, the EV business is just a shade away from overtaking the Tata Motors’ diesel vehicles unit.