Greaves Cotton soars after EV arm inks investment deal with Abdul Latif Jameel

Greaves Cotton jumped 7.20% to Rs 173.40 after the company announced strategic investment by Abdul Latif Jameel in its electric vehicle (EV) arm Greaves Electric Mobility.

Greaves Electric Mobility (GEMPL), Greaves Cotton and and Abdul Latif Jameel International DMCC (investor) have executed a share subscription agreement and a shareholders' agreement for a proposed investment by the investor in GEMPL of $150 million for subscription by the investor to 68,35,450 equity shares of GEMPL to be issued and allotted to the investor on a preferential allotment through private placement basis resulting in a shareholding of 35.80% on a fully diluted basis in GEMPL.

GEMPL shall also have a right (but not an obligation) to require the investor to make further investments (optional further investments), in one or more tranches, into GEMPL of up to $70 million by way of a primary subscription within a period of 12 months from the consummation of the proposed investment.

Currently, GEMPL is a wholly owned subsidiary of Greaves Cotton. Pursuant to the consummation of the proposed investment, the company will have a shareholding of 61.38% on a fully diluted basis in GEMPL and post consummation of the proposed investment, GEMPL will continue to be a subsidiary of the company.

Additionally, post the consummation of last tranche of optional further investments, GEMPL will continue to be a subsidiary of the company.

GEMPL, incorporated in 2008, is primarily engaged in the business of development, manufacturing and marketing of fully assembled electric two-wheeler and electric three-wheeler for personal mobility, industrial applications and materials movement. It manufactures electric two-wheelers under the brand name of Ampere Vehicles and three-wheeler vehicles (E-Auto and E-Rickshaw) under the brands Ele and Teja.

Abdul Latif Jameel is an independent, family-owned, diversified global investor and operator. The venture builds on Abdul Latif Jameel's extensive global experience in the automotive market as one of the leading independent distributors of Toyota products for over 65 years.

The Jameel Family, who own Abdul Latif Jameel, are also early-stage investors and the third-largest shareholder of US electric vehicle manufacturer Rivian. The Family are also investors in other cutting-edge innovators such as US venture-backed aerospace company Joby Aviation through their global investment arm JIMCO.

Nagesh Basavanhalli, MD and Group CEO, Greaves Cotton, said: This investment from Abdul Latif Jameel is an important step towards making clean, sustainable and affordable mobility solutions truly accessible to a much wider customer base.

Through sheer hard work, innovation and by seizing the opportunities presented by changing personal mobility preferences, we have emerged as one of India's fast growing EV brands. With this investment, we will continue to deliver tangible value to our customers and shareholders alike.

Greaves Cotton is a diversified multi-product and multi-location engineering company.

The company's consolidated net profit rose 22.42% to Rs 16.71 crore on a 19.30% increase in sales to Rs 620.82 crore in Q4 FY22 over Q4 FY21.

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