Hero Electric Vehicles will invest Rs 700 crore by 2025 to rev up its business expansion, including setting up of a new manufacturing unit, for which it has raised Rs 220 crore to part-fund the activities, according to a top company official. The current funding round was led by UAEs Gulf Islamic Investments (GII) along with participation from existing investor OAKS. The round values the company at over Rs 1,000 crore, one person aware of the details of the transaction told BloombergQuint.
The electric 2-wheeler maker will allocate this investment towards expanding production capacity, consolidating market position to strengthen market leadership, invest in futuristic technology, and growing footprint across India-like markets. Avendus Capital was the exclusive financial advisor to Hero Electric on the transaction.
The company is planning to set up a new manufacturing facility with an annual capacity of 10 lakh units besides increasing production at its current plant at Ludhiana to 3 lakh units per annum from 75,000 units at present, as it targets to sell around 10 lakh units a year by 2025-26.
“The Electric vehicle’s market has undergone tremendous change over the last few years since we raised our first round of funding. The policies are extremely conducive for the growth of the segment and despite the pandemic, the company is poised to grow at over 2X from the last fiscal. Hero aims to sell over 1 million units per year in the next couple of years. This round of investments which is a first of a larger scheme will help expand our manufacturing capacities, increase R&D spends that will enable us to continue to launch innovative products to disrupt the category. Hero is committed to its mission of – No Emission and builds a sustainable future that is electric” said Naveen Munjal, managing director, Hero Electric.
Hero Electric currently has over 700 sales and service touchpoints spread across the country with over 3.5 lakh electric two-wheelers in India.