Murugappa Group’s EV Arm TI Clean Mobility To Raise INR 580 Cr To Build EV Tractors, HCVs

Indian conglomerate Murugappa Group’s electric vehicle (EV) arm, TI Clean Mobility (TICMPL), has signed a definitive agreement to raise INR 580 Cr ($69.4 Mn)  in a mix of equity and compulsorily convertible preference shares (CCPS).

In a regulatory filing with the BSE, parent Tube Investments of India (TII) said that the capital will be raised from private equity (PE) firm GEF Capital via its two funds — GEF South Asia Growth Invest III and GEF South Asia EBT Trust III.

The proceeds will enable the EV company to scale up its EV offerings and offer “cleaner commercial mobility solutions”.

“GEF is renowned for their commitment to environmental stewardship and their investment in TICMPL validates our vision and strengthens our resolve to provide cleaner commercial mobility solutions,” TII’s executive chairman S Vellayan said.

Commenting on the fundraise, GEF Capital’s cofounder and managing partner Sridhar Narayan said, “We’re excited to partner with the Murugappa Group and invest in TI Clean Mobility – its differentiated platform targeting productive subsegments with a strong focus on electrification. Led by industry veteran S. Vellayan and supported by a talented team, they’ve shown early success with their unique goto-market strategy. We look forward to supporting them in shaping the future of clean mobility”.

As per the company, the fundraise is part of TI Clean Mobility’s plans to raise INR 3,000 Cr. With this, the EV firm has raised INR 2,530 Cr to date. Kotak Investment Banking acted as TICMPL’s financial advisor for the deal.

TI Clean Mobility is focussed on manufacturing a range of small and heavy commercial electric vehicles, including three-wheelers and tractors. With its presence across South India, the EV company plans to expand operations across the country. 

In a statement, TI Clean Mobility said that it is in advanced stages of developing electric tractors and electric small commercial Vehicles that will be launched in the coming quarters.

The Murugappa Group’s EV arm aims to tap into the niche commercial EV space, which offers higher margins and bigger ticket size. It is looking to cater to the light commercial vehicle (LCV) space, which bears the brunt of fluctuating fuel prices, leading to higher transportation costs. 

But, as more and more companies turn electric, TI Clean mobility aims to grab a pie of this niche segment. It will compete with the likes of legacy players such as Tata Motors and Mahindra as well as emerging players such as Altigreen Propulsion Labs, Cell Propulsion, ElectronEV, and Euler Motors, among others. 

At the heart of this is the growing Indian EV market, which is projected to reach a market size of $110.74 Bn by 2029.

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