Tube Investments of India Ltd (TI) has announced the setting up of a new wholly owned subsidiary and the acquisition of an electric tractor firm to pursue clean mobility business by investing ₹350 crore.
“The formation of a separate subsidiary and acquisition of a controlling stake in Cellestial will enable the company to bring required focus to the emerging growth opportunities in electric vehicles,” said M.A.M. Arunachalam, chairman, TI.
“These new EV products along with the existing product portfolio of bicycles and e-bicycles will further strengthen the company’s efforts towards climate change and sustainability,” he said.
The new subsidiary will consolidate the electric 3W and other EV-related ventures. TI will infuse ₹350 crore into the new subsidiary through a combination of equity, preference and debt instruments.
The Murugapp Group firm, also said that it was all set to pick up a 70% stake in electric tractor start-up firm Cellestial E-Mobility Pvt. Ltd. by making a strategic investment of ₹161 crore in an all-cash transaction, it said in a regulatory filing.
Cellestial is a start-up company engaged in design and manufacture of electric tractors, aviation ground support electric equipment and other electric machinery. It has a paid up capital of ₹15.66 lakh. It had already designed and developed two tractor prototypes for production.
The proposed investment is in line with TI’s intent to broad base its product and business portfolio with a view to reduce its dependence on revenue streams, which are cyclical in nature, the company said.
The acquisition would be completed before March 15, subject to shareholders approval and the satisfactory completion of the conditions precedents as contained in the agreements, it said.
TI will enter into a share subscription and purchase agreement with Cellestial founders and other existing shareholders. Further, it will seek shareholders nod through postal ballot.
