APG, Marubeni, CPPIB, Mubadala eye Macquarie’ $200 million Vertelo fund raise

Macquarie, which backs Vertelo, is one of India’s largest foreign infra investors. (Photo: Reuters)
Macquarie, which backs Vertelo, is one of India’s largest foreign infra investors. (Photo: Reuters)

Summary

  • Macquarie Asset Management has appointed EY to find an investor in the fleet electrification platform Vertelo.

Dutch pension fund APG, Japan’s Marubeni Corp., Canada Pension Plan Investment Board (CPPIB) and the UAE's Mubadala Investment Co. are among investors who have expressed interest in Macquarie Asset Management’s Indian fleet electrification platform Vertelo, two people aware of the development said.

Macquarie Asset Management has appointed EY to find an investor for a $200 million equity fund raise, the people cited above said on the condition of anonymity. Vertelo works on reducing the upfront capital expenditure needed for the green mobility push; and provides electric vehicle (EV) fleet management services, charging infrastructure, leasing and financing and end of vehicle life management services in the country.

The Green Climate Fund, the world's largest climate fund is an anchor investor in Vertelo, with a commitment to invest $200 million. Vertelo has plans to invest $1.5 billion.

Macquarie Group, one of India's largest foreign infrastructure investors, has invested in the country’s infrastructure space since 2008, ploughing $2.5 billion in equity capital into energy transition, infrastructure and digital communications.

“While the process is in early stages, it has received a lot of interest given the nature of the space that Vertelo operates in," said one of the two people cited above.

Partnerships for EV expansion

Vertelo has inked agreements with JBM and Eka Mobility to buy 2,000 electric buses each; and with Tata Motors Ltd subsidiary Tata Passenger Electric Mobility Ltd for 2,000 Xpres-T electric sedans.

Spokespersons for Macquarie Group and EY declined comment.

A Canada Pension Plan Investment Board spokesperson in an emailed response said, “We will not be commenting on market speculation."

An APG spokesperson in an emailed response said, “APG does not comment on market rumours or speculation."

Queries emailed to the spokespersons of Marubeni Corp. and Mubadala Investment on Wednesday night remained unanswered till press time.

Read more: Etonhurst Capital to raise 500 crore real estate fund for Mumbai redevelopment projects

There is growing investor interest in the green mobility space with the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme with a 10,900 crore allocation replacing the Faster Adoption and Manufacturing of Electric Vehicles (FAME) programme for incentivizing the sale of various electric vehicles. 

Also, 57,613 crore PM-eBus Sewa plans to add 10,000 e-buses on public private partnership (PPP) model for city bus operation. It is backed by the 3,435.33 crore PM-eBus Sewa-Payment Security Mechanism (PSM) scheme for procurement and operation of e-buses by Public Transport Authorities (PTAs) to help support the deployment of more than 38,000 e-buses from FY25 to FY29. Also, 5131 e-buses have been incentivized under the FAME I and II programme.

Analysts remain buoyant about the space.

“The low operational cost will drive the electrification of the private bus fleet; however, the higher upfront cost acts as a deterrent as the government schemes were mainly focused on electrification of the fleet held by PTAs," India Ratings and Research wrote in a report on Tuesday. "

"Ind-Ra opines financial intermediaries would act as an asset owning company and lease buses to private fleet operators for an agreed per km fee or monthly rent. The leasing model will help fleet operators overcome the high upfront cost, provide an opportunity for financial intermediaries to earn adequate yields from a stable stream of cash flows and is likely to enable the incumbent OEMs to scale up. Furthermore, an increase in the availability of heavy-duty public charging stations will be key as charging infrastructure forms a key part of the route planning to provide flexibility to public or private e-bus operators," it said.

“Public transport authorities (PTA) have bid out several e-buses, leading to an order book of over 20,000 buses. Given the large e-bus order book with original equipment manufacturers (OEMs), an improvement in the delivery capacity of suppliers and scaling up of deliveries in FY26 and FY27 is a key monitorable, given the timelines for supply under the concession agreements. Inconsistencies in measuring operational parameters and deductions relating to the same are rating constraints and could necessitate sponsor support," the report added.

There is also growing interest in manufacturing EVs in the country, a recent case in point being Blue Energy Motors Ltd inking an agreement with the Maharashtra state government for manufacturing 30,000 EV trucks in the state.

Read more: Tata Motors' electric truck sales falter after India pulls EV subsidy

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