Tube Investments to buy 70 pc stake in Cellestial E-Mobility for Rs 161 cr

Cellestial E-Mobility is engaged in the design and manufacture of electric tractors, aviation ground support electric equipment and other electric machinery. It has already designed and developed two tractor prototypes for production, TII said in a regulatory filing.

TII, which has recently embarked on an electric 3-wheeler initiative, as part of its foray into clean mobility, said it is also setting up a new 100 per cent subsidiary and will be infusing initial capital to the extent of Rs 350 crore on it.

TII Chairman MAM Arunachalam (known as Arun Murugappan) said, “The formation of a separate subsidiary and acquisition of a controlling stake in Cellestial will enable the company to bring required focus to the emerging growth opportunities in electric vehicles.” These new EV products along with the existing product portfolio of bicycles and e-bicycles will further strengthen the company’s efforts towards climate change and sustainability, he added.

The company said it has signed shares subscription and purchase agreement, with Cellestial E-Mobility, its founders and other existing shareholders in connection with the making of a strategic investment, in an all cash transaction of Rs 161 crore to acquire a controlling stake of up to 70 per cent in the share capital of Cellestial.

The acquisition will be through the purchase of equity shares from the founders and other existing shareholders of Cellestial and by way of subscription to fresh equity shares to be issued by Cellestial, said TII which is into manufacturing of bicycles and engineering, among others.

TII will also seek approval of its shareholders for incremental increase in investment in Cellestial up to Rs 139 cr, based on its business requirements so that the total investment in the start-up will not exceed Rs 300 cr. The acquisition will be completed before March 15, 2022, subject to shareholders approval and satisfactory completion of the conditions of the agreements executed between the parties, the filing said. TII said this new subsidiary will consolidate the electric 3W venture and other EV-related ventures. “The company will be infusing initial capital to the extent of Rs 350 crore into the new subsidiary for clean mobility.”