It was last week that the chairman of Tata Trusts sold his entire equity holding in Ampere Vehicles to an engine manufacturer Greaves Cotton which is based in Mumbai. Following this move, the former Tata Sons Chairman Ratan Tata is believed to have gained more than twice his investment.
The investment of Tata amounted to about Rs 3 crore in Coimbatore-based electric vehicle start-up in his personal capacity in mid-2015. This also marked his first ever investment in an auto company.
“Tata sold his stake in Ampere, earning more than two times. Most investors made similar returns. Kris (Gopalakrishnan) came into the company later, so his returns could have been lower than Tata’s,” a source said.
Greaves Cotton stated that the company will take over Ampere for Rs 77 crore. This will value the company at Rs 115 crore. It has also promised to acquire another 13 percent in Ampere for Rs 75.5 crore. Almost the entire management of Ampere has been retained by Greaves.
After the deal, Ampere will become a subsidiary of the profit-making Greaves Cotton, which has been working on electric vehicle technology. Following this acquisition, the company is expecting to boost up the product and new technology development process.
Talking about the current operations, Ampere makes one electric scooter, an electric bicycle and a load carrying three-wheeler that are mostly powered by old generation lead-acid batteries.
“Ampere will strengthen its two-wheeler play with products that will have better range and power. However, the idea would be to reduce the acquisition cost of the vehicle by way of technology innovation,” the source added.
The prices of electric vehicles have not gone down as expected earlier. The reason is a slowdown in the price of batteries. While range anxiety among consumers remains the top concern, the higher acquisition cost is also a major deterrent for buyers.