Greaves Electric Mobility Receives SEBI Nod for IPO
Greaves Electric Mobility, the electric vehicle (EV) arm known for brands such as Ampere, Eltra, and Ele, has secured approval from the Securities and Exchange Board of India (SEBI) to proceed with its initial public offering (IPO). This development marks a significant step for the company as it seeks to raise capital from the public markets. The market regulator provided its observations letter on 8 May, which, in regulatory terms, signifies the go-ahead for the public issue.
The proposed IPO comprises a combination of a fresh issue of equity shares and an Offer for Sale (OFS) by existing shareholders. The fresh issue is aimed at raising ₹1,000 crore, while the OFS involves the divestment of 18.9 crore equity shares. Under the OFS component, the promoter selling shareholder plans to offload 5.1 crore equity shares, and Abdul Latif Jameel Green Mobility Solutions DMCC, an investor selling shareholder, intends to sell 13.8 crore shares. Greaves Electric Mobility had initially filed its draft papers with SEBI in December 2024.
Strategic Deployment of Capital
According to the draft prospectus, Greaves Electric Mobility has outlined specific plans for the proceeds generated from the fresh issue. A substantial portion, ₹375.2 crore, is earmarked for product and technology development at the company's Bengaluru Technology Centre. Furthermore, ₹82.9 crore is allocated for the development of in-house battery assembly capabilities.
The company also plans significant investments in expanding manufacturing capacities. ₹19.8 crore is designated for boosting the capacity of its wholly owned material subsidiary, Bestway Agencies. Additionally, ₹38.2 crore will be used for expanding the manufacturing capacity of MLR Auto, another material subsidiary. Greaves Electric Mobility also intends to increase its stake in MLR through acquisitions, for which ₹73.6 crore has been allocated. Other proposed uses of the fresh issue proceeds include ₹27.8 crore for increasing digitization and deployment of information technology infrastructure, supporting inorganic growth through acquisitions, and general corporate purposes.
Business and Financial Landscape
Greaves Electric Mobility operates across both the electric two-wheeler (E-2W) and three-wheeler (3W) segments. Its offerings cater to a diverse customer base, serving both B2C and B2B markets for personal and commercial applications. The E-2W portfolio includes High Speed, City Speed, and Low Speed e-Scooters for various use cases. In the 3W segment, the company provides electric three-wheelers, internal combustion engine three-wheelers (running on diesel or CNG), and e-rickshaws, with models for both cargo and passenger transport. As of September 2024, the company operated three manufacturing facilities located in Ranipet (Tamil Nadu), Greater Noida (Uttar Pradesh), and Toopran (Telangana).
On the financial front, the company reported revenue from operations of ₹611.8 crore for fiscal year 2024. For the six-month period ended September 30, 2024, the revenue from operations stood at ₹302.2 crore.
The book running lead managers appointed for the issue are Motilal Oswal Investment Advisors, IIFL Capital Services, and JM Financial.
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