With this investment, the Mumbai-based firm has become a “significant minority stakeholder” in Hero Electric.
“This is our first external fund raising. Till now, we had only raised funds internally. The raised capital will be utilised to set up a new plant, diversify our product portfolio and acquire new technology,” Hero Electric Managing Director Naveen Munjal said.
The funds would also be utilised to strengthen the company’s research and development capabilities to achieve certain rate of localisation, he added.
When asked about the quantum of stake divestment to Alpha Capital, Munjal said, “It is more than 10 per cent but less than 25 per cent.”
He added that the company would look for another round of fund raising in the next 12-18 months to further support its expansion process.
The company, which has transitioned its entire product portfolio to lithium-ion battery-powered two-wheelers, plans to launch more products in a phased manner.
“The electric vehicle (EV) market is expanding. To achieve the vision of exponential growth and double sales every year, the company plans to make significant additions to its manufacturing capacity by setting up multiple plants over the next five years,” Munjal said.
Over the past decade, Hero Electric has launched 15 electric two-wheelers in India. It has around 45 per cent market share in the country’s electric two-wheeler segment.