Hero Electric Vehicles Pvt. Ltd, which manufactures lithium-ion battery-powered two-wheelers, said on Tuesday that it has raised Rs 160 crore ($22.3 million at current exchange rates) from Mumbai-based investment management firm Alpha Capital Advisors Pvt. Ltd.
Alpha Capital Advisors will pick up a significant minority stake in the company, according to a statement.
“This fund infusion will help us diversify our product portfolio, acquire new technology and focus on strengthening our research and development capabilities to achieve certain rate of localisation,” said Naveen Munjal, managing director of Hero Electric.
The company also plans to make significant additions to its manufacturing capacity by setting up multiple plants over the next five years.
Delhi-based Hero Electric, which is part of the Vijay Munjal-led Hero Eco, currently has a manufacturing facility at Ludhiana in Punjab.
Hero Electric has launched 15 electric two-wheelers in India over the past decade and claims to have 45% share of the country’s market.
Investment management firm Alpha Capital Advisors was founded by Vishal Ootam, Vivek Anand, Sandeep Somani and Kenneth Serrao.
It invests in entrepreneur-led consumer-facing businesses in India, according to its website. Alpha Capital’s portfolio firms include non-banking financial company InCred Finance and supply-chain financing startup CredAble.
Steer Advisors served as Hero Electric’s financial adviser for the latest transaction.
Deals in the space
The electric vehicles industry in the country is still nascent and comprises less than 1% of total vehicle sales, according to an Assocham study carried out with global advisory services firm EY.
Charging infrastructure remains a crucial hurdle even as the Indian government pushes for greater use of electric vehicles.
A number of companies have forayed into the segment and raised funding in the recent past.
In October, The Economic Times reported that Taiwanese two-wheeler maker Kwang Yang Motor Co. Ltd, or Kymco, was investing in Gurugram-based electric vehicle startup Twenty Two Motors.
In September, Mumbai-based electric vehicle startup Strom Motors, run by E14 Technologies Pvt. Ltd, raised funding from the Indian Angel Network.
In August, engineering company Greaves Cotton agreed to acquire a majority stake in electric two-wheeler maker Ampere Vehicles.
In the same month, TVS Motors made an additional investment of Rs 6 crore in electric bike maker Ultraviolette Automotive.
In July, Hero MotoCorp decided to invest Rs 130 crore ($19 million) more in electric scooter startup Ather Energy. The two-wheeler maker had first invested Rs 205 crore in Ather Energy in 2016.