TVS seems to be raising up to Rs 5,000 cr for the EV push | Tech Reddy


MUMBAI/NEW DELHI : TVS Motor Co. Ltd is in the main speech to be raised 4,000-5,000 crore from private equity firms to fund the expansion plan of the group’s electronics arm, two people with direct knowledge of the matter said.

“TVS wants to consolidate its position as a leader in the EV segment by using the right product and expanding its network presence across the country,” said one of the two people, requesting anonymity.

“Nearly 500-650 million dollars can be raised by TVS Motor, which can be used for organic and brownfield expansion in the EV space. TVS wants to increase the revenue share from its EV business, investing in the growing demand for electric vehicles worldwide . EV is clearly the future of mobility, and TVS aspires to have a leadership position in this area,” said the first person.

TVS Motors is doubling down on electric vehicles as India sharpens its focus on reducing urban traffic pollution and reducing dependence on fossil fuels amid rising fuel prices.

Two-wheeler buyers are also switching to electric scooters as they seek to cut fuel costs and reduce emissions in India’s most polluted cities.

Encouraged by business prospects and the power to invest in clean technology, private equity companies and venture capital funds are making huge investments in EV startups in India. Funding for EV tech startups recorded its all-time high in 2021 at $444 million in 25-odd deals.

But it’s not just the first to benefit. For example, PE firm TPG Rise Climate bought a 15% stake in Tata Motors’ electric vehicle business 7,500 crore in October.

Startups like Ola Electric ($253 million), Blusmart ($25 million), Simple Energy ($21 million), Revolt ($20 million) and Detel ($20 million) attracted the highest investment in the EV space in 2021.

Further, TVS Motor invested in electric two-wheeler maker Ultraviolette Automotive in December, while Amara Raja Batteries and Petronas Ventures invested in electric battery maker Log9 Materials.

The fundraising trend reflects growing investment interest in EV and related businesses such as battery manufacturing and charging solutions.

“TVS is in advanced discussions with PE players. The money is likely to be collected in the September quarter itself. To raise funds, equity from TVS Motor’s wholly-owned subsidiary TVS Electric Mobility Ltd can be floated to investors. Depending on the valuation of the TVS Motor Mobility deal, the amount of the stake will be decided, but it seems that a large amount of stake around 40% (in the subsidiary) may be sold by the parent TVS Motor in order to raise the necessary funds, a part of which can be used to acquire the startup. in the EV space,” said the second person, requesting anonymity.

“The business will grow rapidly, and TVS has strong plans for this segment,” said the second person, adding that the government has announced several incentives to encourage EV adoption.

An email sent to a TVS spokesperson did not elicit any response.

TVS’s latest capital raising plan also aims to expand its partnership with BMW Motorrad for the joint development of new platforms and future technologies, including EVs.

TVS had 19% market share in the high-speed electric scooter segment in fiscal year 2022.

TVS can use the proceeds of the proposed financing to make new electric vehicle facilities and battery manufacturing facilities, which are similar to the architecture adopted by the Tata group, which has created a new company restructured as a step-down subsidiary of Tata Power to supply. lithium batteries for the home and related services for electric vehicles while keeping costs under tight control.

TVS sold more than 10,000 electric vehicles during FY22, according to the company’s investor presentation. It has partnered with Tata Power and Jio-BP to set up EV charging infrastructure.

“TVS, in the coming months, will focus on offering a variety of products under the iQube brand (EV scooter) to customers so that they can access the latest technology and mobility experience at an affordable price,” said the second person.

Electric two-wheelers make up 4.5% of all registered two-wheelers. However, many consumers are considering EVs as their means of transportation.

“The industry has seen a robust growth of around 5.6 times. The growing sensitivity to the impact of the climate and the improved overall value in the performance of the proposal taking into account the increase in fuel prices have caused immediate consumer interest in the sector (EV)…production-related incentives (PLI), government funding and other infrastructure initiatives related to EV the government is strengthening the faith of consumers in the sector, said the TVS annual report.

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