Ampere Owner Greaves Cotton's Stock Gains As Rivian Backer Invests $150 Million

Shares of Greaves Cotton Ltd. jumped the most in 20 weeks in intraday trade after its arm that makes Ampere electric scooters got a $150-million (about Rs 1,160 crore) strategic investment from Rivian-backer Abdul Latif Jameel.

Jameel has executed an agreement with Greaves Electric Mobility Pvt., the wholly owned subsidiary of Greaves Cotton, to subscribe to 68.35 lakh shares, according to an exchange filing on Thursday. The shares will be issued through a preferential private placement, giving Jameel a 35.80% stake on a fully diluted basis. Greaves Cotton will hold 61.38%.

Greaves Electric also has the right (but not an obligation) to require Jameel to make further investments worth $70 million (close to Rs 543 crore) in one or more tranches via primary subscription within 12 months of completing the current transaction.

Jameel represents the Jameel Family, the third-largest shareholder of U.S. electric vehicle maker Rivian Inc.

The proceeds from the investment will be used to develop new products, associated technologies and brand awareness. It's a major milestone in the development of the electric two- and three-wheeler ecosystem in India, the statement said. “These segments are less dependent on commercial charging infrastructure, unlike passenger cars.”

Greaves Electric makes battery-powered two-wheelers (Ampere), three-wheelers (Ele) and e-rickshaw (Teja).

Shares of Greaves Cotton rose as much as 13.6% in early trade Thursday. The stock's trading volume was more than 14 times the 30-day average at that time of the day. The scrip surpassed the 50-day simple moving average, indicating potential upward price momentum. The stock, however, pared almost all the gains to end the session 2% higher.

Of the seven analysts tracking Greaves Cotton, six recommend a ‘buy' and one suggests a ‘hold', according to Bloomberg data. The average of the 12-month consensus target prices implies an upside of 14.8%.