Hero Electric Bags Rs 220 Crore To Fund EV Expansion

India’s largest electric vehicles maker Hero Electric Vehicles Pvt. Ltd. has raised Rs 220 crore in a funding round led by UAE’s Gulf Islamic Investments as it looks to step up domestic growth with an eye on international expansion.

The round values the company at over Rs 1,000 crore, one person aware about the details of the transaction told BloombergQuint. The company declined to comment on the valuation.

The proceeds from the round—which also saw participation of existing investor Oaks Asset Management—will be used to towards expanding production capacity, consolidating market position, invest in futuristic technology and grow footprint across India-like markets, Hero Electric said.

“The electric vehicles market has undergone tremendous change over the last few years since we raised our first round of funding,” Naveen Munjal, managing director of Hero Electric said in a statement, adding that policies are now extremely conducive for the growth of the EV two-wheeler segment. He said that despite the Covid-19 pandemic, the company expects sales to grow at over two-fold from the last fiscal.

As part of its expansion strategy, Munjal said Hero Electric aims to set up multiple plants over the next couple of years and will also focus on India-centric, cost-effective innovations to drive the growth of electric mobility.

This fundraise by Hero comes at a time when competition is heating up in the nascent Indian electric two-wheeler market.

Ola is weeks away from launching its electric scooter and a plant with a capacity of 10 lakh vehicles. Bengaluru-based Ather Energy is looking to expand its capacity as well, by 5 lakh by next year.

Hero said it aims to sell over 10 lakh units annually in the next few of years, but did not give a specific timeline.