Greaves Electric Mobility has taken a significant step toward expanding its reach in the electric vehicle (EV) market by filing for an INR 1,000 crore Initial Public Offering (IPO) with the Securities and Exchange Board of India (SEBI). Notably, Greaves Cotton is the parent company of Greaves Electric Mobility, overseeing its strategic direction and supporting its growth in the EV market.
Greaves Electric Mobility IPO Details
The IPO is structured as both a fresh issue and an offer for sale (OFS). It includes a fresh issue of shares amounting to INR 1,000 crore, alongside an OFS of up to 18.94 crore shares. In this, Greaves Cotton aims to offload 5.1 crore shares, and Abdul Latif Jameel Green Mobility Solutions DMCC plans to sell around 13.84 crore shares. Currently, Greaves Cotton holds a commanding 62.48% stake, while Abdul Latif Jameel owns 36.44%.
Allocation of IPO Funds
The money raised will be channelled into several strategic areas:
- Technology and Product Development: INR 375.2 crore will be invested in enhancing capabilities at the Bengaluru Technology Centre.
- Battery Assembly: INR 82.9 crore is designated for setting up in-house battery assembly operations, a move that could significantly reduce costs and improve supply chain control.
- Manufacturing Expansion: The IPO will also fund manufacturing expansions, with INR 19.8 crore for Bestway Agencies and INR 38.2 crore for MLR Auto to boost production capacities.
- Stake Acquisition: An investment of INR 73.6 crore is planned to increase Greaves Electric’s stake in MLR Auto, potentially strengthening its market position.
- Digitization and IT: INR 27.8 crore will go towards upgrading digital systems and IT infrastructure, aiming to streamline operations and enhance customer interaction.
- General Corporate Purposes: The remainder will be used for strategic acquisitions and other growth initiatives.
Greaves Electric Mobility isn’t new to the scene; it’s a pioneer in India’s burgeoning EV market. With an extensive range that includes both two-wheelers and three-wheelers, the company serves diverse markets, from personal to commercial users. Their offerings cover everything from high-speed scooters to e-rickshaws. Manufacturing is spread across three key locations: Ranipet in Tamil Nadu, Greater Noida in Uttar Pradesh, and Toopran in Telangana.
Financial Performance
Despite its growth ambitions, recent financials paint a picture of challenges. Revenue dropped to INR 611.82 crore in FY24 from INR 1,121.57 crore the previous year, with net losses ballooning to INR 691.57 crore from just INR 19.91 crore. The first half of FY25 showed continued revenue at INR 302.23 crore but with a net loss of INR 106.15 crore, indicating ongoing struggles.
Market Trends & Strategic Implications
Greaves’ IPO filing coincides with a wave of EV companies going public. Competitors like Ather Energy and Ola Electric have also recently announced IPOs, signalling robust market interest in electric mobility. This year, the Indian IPO market has seen a significant uptick, with proceeds more than doubling compared to last year.
This IPO isn’t just about raising capital; it’s about positioning Greaves Electric Mobility to compete effectively in a fast-growing sector. The company plans to leverage these funds to drive innovation, expand manufacturing, and enhance digital infrastructure. With lead managers like Motilal Oswal Investment Advisors, IIFL Capital, and JM Financial, there’s a clear intent to make this IPO a cornerstone of their growth strategy.
A Leap Forward
The filing for an IPO by Greaves Electric Mobility marks a bold step. It’s an endeavor to not only address current financial challenges but also to cement its role as a leader in India’s EV market. By focusing on technology and scalability, the company aims to ride the wave of EV adoption in India to new heights.
The most recent electric vehicle (EV) IPO was that of Ola Electric Mobility, which garnered significant attention from investors. This INR 6,145 crore IPO made its stock market debut on 9 August 2024, delivering an impressive 20% return on its listing day. However, the company’s performance in the stock market has since experienced a rollercoaster ride, marked by numerous fluctuations. For more information related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.
