Tube Investments of India (TII), part of the Murugappa group, Monday announced its plans to form a subsidiary to carry on the proposed electric three-wheeler venture and other EV-related projects. The company will be infusing initial capital to the tune of Rs 350 crore into the new subsidiary for clean mobility, through a combination of equity, preference and debt instruments.
TII, which has been exploring new growth opportunities within clean mobility, had recently embarked on an electric 3-wheeler initiative. As part of its EV push, the company, through its clean mobility subsidiary, is proposing to acquire a controlling stake of about 70% in the equity share capital of Cellestial E-Mobility at an investment of Rs 161 crore, through a combination of primary and secondary purchase of shares.
Cellestial is a start-up engaged in the design and manufacture of e-tractors. The electric tractors developed by Cellestial offer several advantages like a swappable battery and a 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, said a TII release.
M A M Arunachalam (known as Arun Murugappan), chairman of TII, said, “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.”
The proposed investment in Cellestial is in line with the company’s intent to broad base its product and business portfolio to reduce its dependence on revenue streams, which are cyclical in nature. The acquisition would be completed before March 15, 2022.
TII had recently revealed that its long-term objective was to build six new business platforms, each of which can have multiple divisions, focused on its line of business. The company currently has four business platforms such as engineering, metal formed products, mobility (cycles and the proposed three-wheeler EV) and other businesses. In a bid to insulate the company from the cyclicality of the auto-component related business, and to expand the company further, TII has chalked out strategies to grow them to ten platforms, over a period of time.
