Tube raises Private Equity money in EV subsidiary

Electric Vehicles (EV) continues to attract investors’ attention. Now Tube Investments of India (TII) has announced fund raising in it’s wholly owned subsidiary, TI Clean Mobility Private Limited (TICMPL).

  • TICMPL, a recent initiative of TII, is focused into manufacture and marketing of Electric Three Wheelers and through it’s subsidiaries into Electric Tractors and Electric Heavy Commercial Vehicles.
  • TICMPL targets to raise Rs 3,000 cr
    • Immediate investment of Rs 1,275 cr
      • Rs 675 cr from TII
        • Rs 250 cr as existing equity, i.e., already funded
        • Rs 425 cr as CCPS
          • Rs 389 cr are already invested as inter-corporate deposits
      • Rs 600 crore as private equity in the nature of CCPS
        • Rs 400 cr from Multiples
        • Rs 200 cr from SBI
    • Rs 675 cr as a right to invest (optional) in future
      • Rs 600 cr by Multiples and/ or its affiliates along with the other investors
      • Rs 75 cr by TII if above Rs 600 cr investment happens
    • Rs 1,050 cr additional fund raise by March 2024 (from other investors)
  • The conversion ratio of CCPS (investors’ as well as TII) will be arrived based on the valuation of TICMPL at the time of the conversion.

Multiples is a well known private equity fund run by the veteran Ms Renuka Ramnath. Her decision to invest is surely a positive. However, not much details are available on the transaction for an investor to take any informed call.

For easy reference, TICMPL plans to primarily focus upon electric 3-wheelers, tractors and commercial vehicles. It had launched a 3-wheeler EV in September 2022 and had then indicated to launch products across all three categories over the next 6 months i.e., by March 2023. (These time lines are already extended compared to the original plans that were shared in February 2022)

Besides the launch of e-3-wheeler products under the brand Montra Electric, it plans to launch electric tractors under the Cellestial Egat brand, and electric heavy commercial vehicles through the Rhino 5536.

The Company has currently decided to stay away from electric 2-wheelers and passenger cars due to unattractive cost dynamics and also the intense competition.

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