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GEF Capital invests in auto component maker Hero Motors
Industry News- Jan 09,23
With a total investment of Rs 1,500 crore over the course of the coming three years, Hero Motors Ltd aims to transform itself into a global EV solutions company from India. The funds will be utilised to augment its growth and expansion, with a significant focus on serving top global OEMs in the EV sector.
New Delhi
Hero Motors Limited - the flagship auto components company of the HMC (Hero Motors Company) Group that focuses on gears, transmissions and bike powertrains - has raised growth equity capital from private equity firm GEF Capital Partners and its LPs for a minority stake. The automaker will use these funds to further augment its growth with a significant focus on serving the original equipment manufacturers in the electric mobility sector by setting up additional technology centers for research & development (R&D) along with expanding its presence globally by opening new facilities to cater to its customers’ growing demands.
Commenting on the development, Pankaj Munjal, Chairman, Hero Motors Company, said, “We are extremely excited to have GEF Capital Partners, a marquee investor, partner with us in our endeavour to be amongst the leading cutting-edge technology players in global electric vehicle (EV) components value chain. This fundraise is testimony to the brilliant platform we have built over the last years having deep relationships with the OEMs from across the world.”
Sridhar Narayan, Managing Partner, GEF Capital, said, “Hero Motors is the largest manufacturer of e-bike components in India and is actively transitioning its gears & transmission business towards electric vehicles by acquiring capabilities across product engineering and process engineering. We are excited to partner with Hero Motors in its next phase of organic and inorganic growth”
Commenting on the partnership, Amit Gupta, MD & CEO, Hero Motors Ltd, shared, “This fundraise will help the company further augment its growth trajectory by enabling it to expand its network of facilities and allocate more capital towards R&D to be able to provide innovative products and solutions to our customers. The company has been consistently growing at over 50 percent CAGR in the last few years and the capital will be used to invest in further strengthening the company’s market position in its relevant markets and especially the fast-growing electric vehicle components space.”
With a total investment of Rs 1,500 crore over the course of the coming three years, Hero Motors Ltd aims to transform itself into a global ev solutions company from India. The funds will be utilised to augment its growth and expansion, with a significant focus on serving top global OEMs in the EV sector. The planned capital expenditure over the next three years will be used to set up a forging facility for high-end cars and a disc brake manufacturing plant. HMC Group expects nearly 60 per cent of its revenues to come from the EV parts venture in the mid-term. The turnover of HMC Group is expected to double from Rs 5500 crore in 3 years time.
Hero Motors is into auto components and has majority of its business for export with iconic customers in Europe and North America. Hero Motors has three divisions which include:
- Transmission: The division - products of which include transmissions, gears and related components - has approximately 85 per cent business in the EU, US & ASEAN with manufacturing locations in India, UK and Thailand.
- Bike Power Train: The division’s products include CVTs for E bike, motors in HYM drive systems and complete EDU system in Hero EDU Systems. It is currently entirely an export focused business with manufacturing based out of India. The next phase will involve setting up a facility in Europe.
- Alloys & Metallics: Major operations are in India for domestic customers. HM has recently set up a state-of-the-art facility for alloy products and is working with customers in the EU for their EV chassis requirements.
Hero Motors is part of the HMC Group, a diversified conglomerate with interests in automotive components, e-mobility, cycles, real estate and premium retail. The HMC Group has a $ 1.2 billion asset base and employs over 7,500 people across the globe within cycle giant Hero Cycles, auto parts manufacturing companies ZF Hero Chassis Systems Pvt Ltd and Munjal Kiriu Industries Pvt Ltd, hospitality arm Munjal Hospitality, and luxury home décor products company Oma Living.
Hero Motors
Pankaj Munjal
auto components
GEF Capital
EV components
e-bikes
EV power trains
gears
transmissions
bike powertrains
EV parts
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