With electric vehicles set to gain popularity, the country's largest electric two-wheeler maker Hero Electric has roped in Alpha Capital Advisors, a Mumbai-based investment management firm, as an equity partner.
The automaker, planning to set up a new manufacturing facility in the South, is also planning to expand business with a target to sell 50,000 units in the current financial year.
"The fund infusion will help us diversify our product portfolio, acquire new technology and focus on strengthening our research and development capabilities to achieve a certain rate of localisation. Progress in all these areas will help accelerate Hero Electric’s already robust growth,” said Naveen Munjal, managing director, Hero Electric.
The company would need an additional round of fundraising in 12-18 months, Munjal added.
According to the company, Alpha Capital has picked up a "significant minority" stake in the automaker. It did not reveal the exact stake sale.
Hero Electric started manufacturing two-wheelers 12 years back and now has the country’s largest manufacturer of electric two-wheelers with around 45 per cent market share.
The company has a network of more than 500 touch points across the country with over 200,000 customers.
Hero Electric plans to sell 40,000 electric two-wheelers during the current financial year, as compared to 31,000 green units last year. It is looking at annual sales of over 100,000 units by 2020-21.
Vishal Ootam and Vivek Anand promoted Alpha Capital that invests into entrepreneur-led consumer-facing businesses in India.
Alpha Capital Advisors had in October announced it would invest Rs 15 billion in consumer-facing businesses over the next three to four years. Some of their investments include Food Link Services Pvt. Ltd., a banqueting and catering major, InCred Finance and CredAble.
Hero Electric has raised Rs 1.6 billion from the investment firm that manages the money of ultra high net individuals.
The withdrawal of incentives for two-wheelers with low speed (up to 25kph) and lead acid batteries from October 1, which many competitors sold in the market, also helped Hero's market performance, as it has already shifted to lithium-ion technology.
The year 2018 has been important for Hero Electric as the company unveiled a line-up of its global products in India and transitioned its entire product portfolio to lithium-ion battery-powered two-wheelers. It now plans to launch more key products in a phased manner.
To achieve the vision of exponential growth and double sales every year, the company plans to make significant additions to its manufacturing capacity by setting up multiple plants over the next five years, said a company statement.
It will also focus on India-centric, flexible and cost-effective innovations that will drive the growth of electric mobility.