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.
“This half a million (capacity) can go up much faster. If we find that the policy is indeed moving in that direction of what the government and Niti Aayog is talking and there is no change in that, we may have to accelerate this year itself and that scale may go up even higher,” Munjal said.
Terming the current mood regarding EVs in India as “exciting times”, Munjal said the company will have to accelerate “much quicker and plants will have to come up much quicker and our products will have to be better than what we have currently.”
As part of its expansion plans, Hero Electric is aiming to increase the number of its dealers across India to 1,000 by next year from around 600 at present.
In terms of products, he said at present the company offers four main models and their variants.”We could be introducing more products in the next year but what we would do along the way is that some products will get upgraded and some products will get phased out…At any point of time we will have 5-7 products and variations below them,” Munjal said. PTI RKL