Hero Electric is planning to raise funds to finance its accelerated expansion to cash in on the wave of electric vehicles (EV) in India, according to a top company official.
The company is looking at an investment of around Rs 700 crore in the next three years to ramp up production capacity of its electric scooters to 5 lakh units annually from about 1 lakh units this year.
“In every aspect we are expanding. There is no looking back for us...We are expanding in terms of dealer network, manpower, product portfolio and manufacturing...We will invest and also raise funds for the same,” Hero Electric Managing Director Naveen Munjal told PTI.
Asked how much funds the company is looking to raise, he said it has not been finalised and the company is working it out at present.
“We already have external investor. So either that external investor puts in or we get another investor, I am not sure right now. We have to still work on the details,” Munjal said, adding in the next couple of years there would have to be substantial investments, specially in manufacturing.
Currently, Alpha Capital is the investor in Hero Electric outside of the Munjal family.
Commenting on the company’s future plans, he said, “We will have to do a minimum of around Rs 500-700 crore for different applications, and a large part of it will go into manufacturing, product development, R&D and marketing.”
These investments will help in supply chain, dealer network, training and upgradation of dealer network, among others, besides ramping up production capacity, he said.
On capacity expansion, Munjal said,”This year we are going to be almost one lakh (annually). In the next three to four years we want to be at least half a million,” he said.
Depending on how the government policy shapes up, specially how the FAME-II is further fine-tuned to address a wider segment of lower priced electric two-wheelers, the company would align its expansion, he added.