Home / Auto News / Tube Investments to acquire 70% stake in this EV start-up

Muruguppa group firm Tube Investments of India Ltd (TII) on Monday said it will acquire 70 per cent stake in start-up Cellestial E-Mobility Pvt Ltd for 161 crore.

Cellestial E-Mobility is engaged in the design and manufacture of electric tractors, aviation ground support electric equipment and other electric machinery. It has already designed and developed two tractor prototypes for production, TII said in a regulatory filing.

TII, which has recently embarked on an electric 3-wheeler initiative, as part of its foray into clean mobility, said it is also setting up a new 100 per cent subsidiary and will be infusing initial capital to the extent of 350 crore on it.

TII Chairman M A M Arunachalam said, "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."

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 added.

The company said it has signed shares subscription and purchase agreement, with Cellestial E-Mobility, its founders and other existing shareholders in connection with the making of a strategic investment, in an all cash transaction of 161 crore to acquire a controlling stake of up to 70 per cent in the share capital of Cellestial.

The acquisition will be through the purchase of equity shares from the founders and other existing shareholders of Cellestial and by way of subscription to fresh equity shares to be issued by Cellestial, said TII which is into manufacturing of bicycles and engineering, among others.

TII further said it will also seek approval of its shareholders for incremental increase in investment in Cellestial up to 139 crore being earmarked as may become required, into Cellestial, based on its business requirements so that the total investment in the start-up will not exceed 300 crore.

The proposed investments in Cellestial will be either directly or through the proposed wholly-owned subsidiary and the transaction will be subject to approval of the shareholders of the company and the satisfactory completion of conditions in the agreements, the filing added.

"The proposed investment is in line with the company'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," TII said.

The acquisition will be completed before March 15, 2022, subject to shareholders approval and satisfactory completion of the conditions of the agreements executed between the parties, the filing said.

TII said it has been exploring new growth opportunities within clean mobility. In line with this strategy, it has recently embarked on an electric 3-wheeler initiative. It is now proposing to form a new 100 per cent subsidiary to focus on clean mobility. This new subsidiary will consolidate the electric 3W venture and other EV-related ventures.

"The company will be infusing initial capital to the extent of 350 crore into the new subsidiary for clean mobility through a combination of equity, preference and debt instruments," the filing added.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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