The capital expenditure will be allocated for growth in several areas, such as establishing small commercial vehicle facilities, enhancing research and development, improving prototyping abilities, and more.
Montra Electric, the electric vehicle (EV) brand of Chennai’s Murugappa Group, is set for substantial growth with a planned Rs 500 crore investment in FY24–25. The company aims to secure a 15% share of the Indian EV market in the next four to five years.
Kalyan Kumar Paul, Managing Director of Tube Investment (TI) Clean Mobility, which owns Montra Electric, shared that the capital expenditure will drive expansion in various sectors. This includes developing facilities for small commercial vehicles, strengthening research and development, and enhancing prototyping capabilities. A considerable part of the investment will also focus on doubling the company’s workforce from 800 to over 1,600.
Concerning the funding for these extensive plans, Paul, an experienced industry professional, confirmed that a significant amount of capital has already been secured, with more to follow as required.
TI Clean Mobility, in its Q2FY24 investor presentation, revealed investments of Rs 250 crore into TICMPL, a subsidiary, as equity and Rs 500 crore as compulsory convertible preference shares (CCPS). Additionally, private equity and co-investors have contributed Rs 1,200 crore in TICMPL as CCPS, taking the total funds raised to Rs 1,950 crore.
Paul emphasized the company’s commitment to cash prudence and frugality. He outlined that while the company is strategically prepared to become one of India’s top EV companies, executing these plans effectively remains a significant challenge. He added that most of their products will be launched under the ‘Montra’ brand, and the company is actively investing in digital marketing strategies to support its growth.
The Murugappa Group, a 123-year-old conglomerate with a broad portfolio including automobiles, agriculture, engineering, and financial services, is focusing on four key EV segments: electric three-wheelers, medium- and heavy-duty trucks, electric tractors, and small commercial vehicles. The group, a leader in automotive drive and cam chains, also has a notable presence in roll-formed car door frames in India.
Regarding the company’s absence in certain segments like buses, Paul mentioned focusing on current priorities, though not ruling out future ventures based on market trends.
Paul concluded by highlighting the group’s philosophy of underpromising and overdelivering, underscoring the discipline and experience of his team, primarily composed of members from within the group itself.