Marking its aggressive foray into e-mobility space, Murugappa group company Tube Investments of India (TII) has decided to come up with a 100 per cent subsidiary to focus on clean mobility and is planning to infuse around Rs 350 crore into the newly-formed arm through a combination of equity, preference and debt instruments.
The new subsidiary will also acquire a 70 per cent stake in Cellestial E-Mobility, a Hyderabad-based start-up engaged in the design and manufacture of E-tractors. The Cellestial stakes are valued at around Rs 161 crore and will be acquired through a combination of primary and secondary purchases of shares.
“The formation of a separate subsidiary and acquisition of a controlling stake in Cellestial will enable the Company to bring required focus to the emerging growth opportunities in electric vehicles. These new EV products along with the existing product portfolio of bicycles and e-bicycles will further strengthen the Company’s efforts towards climate change and sustainability,” said M A M Arunachalam, Chairman of the company.
According to TII, the makers of iconic bicycle brands like BSA and Hercules, Cellestial offer several advantages like a swappable battery, regenerative brakes, power inversion, charging from residential AC outlet, fast charging and lower total cost of ownership compared to current IC tractors. Besides, these E-tractors will also result in lower CO2 emissions, promote green farming, and will take a step towards a circular economy. Cellestial had unveiled the country’s first electric tractor in March 2020, claiming to be having the capability to cover 75 km on a single charge.
TII has been exploring new growth opportunities within clean mobility. In line with this strategy, the Company had recently lined up its electric 3-wheeler plans. This new subsidiary will consolidate the electric three-wheeler venture and other EV-related ventures.
Late last year, Kalyan Kumar Paul, president of TI Cycles of India had told Business Standard that the company will gradually look into the cargo segment, scooters and e-rickshaws. TII, which operates in three business divisions including engineering, bicycles and metal-formed products, has a market share of around 25 per cent in India’s bicycle market.
The company will be coming up with EVs at a separate unit in its Ambattur facility that may see an investment of around Rs 150-200 crore during the first phase, till 2023. TII’s strategy is to first look into Southern markets and then quickly accelerate its presence to other regions of the country. The advantage with TII as an EV player will be an established supply chain of 3500 direct dealer points for bicycles and 190 exclusive retail outlets under the brand ‘Track & Trail’, that the company can make use of in the initial stages of its EV foray.