Mumbai-based investment management firm Alpha Capital Advisors is reportedly acquiring a minority stake in lithium-ion battery-powered two-wheelers manufacturer Hero Electric Vehicles.
This particular deal has been valued at Rs 160 crore ($22.3 million).
“This fund infusion will help us diversify our product portfolio, acquire new technology and focus on strengthening our research and development capabilities to achieve certain rate of localisation,” said Naveen Munjal, managing director of Hero Electric.
With this, the company is planning to make significant additions to its manufacturing capacity by setting up multiple plants over the next five years. Delhi-based Hero Electric, which is part of the Vijay Munjal-led Hero Eco, currently has a manufacturing facility at Ludhiana in Punjab.
The company has launched 15 electric two-wheelers in India over the past decade and claims to have 45% share of the country’s market.
On the other hand, investment management firm Alpha Capital Advisors was founded by Vishal Ootam, Vivek Anand, Sandeep Somani and Kenneth Serrao. Steer Advisors served as Hero Electric’sfinancial adviser for this particular transaction.
AlphaCapital basically invests in entrepreneur-led consumer-facing businesses in India. Its portfolio firms include non-banking financial company InCred Finance and supply-chain financing startup CredAble.
The electric vehicles industry in the country is still nascent and comprises less than 1% of total vehicle sales, according to an Assocham study carried out with global advisory services firm EY.
A number of companies have forayed into the segment and raised funding in the recent past.