Hero MotoCorp Ltd, India’s biggest two-wheeler maker and the top shareholder of electric scooter maker Ather Energy, has entered the electric three-wheeler segment with a Rs 525 crore (around $60 million) investment in Euler Motors Pvt Ltd.
Hero, promoted by the Munjal family-controlled diversified Hero Group, will get a 32.5% stake in the commercial EV maker in lieu of its investment, it said in a stock-exchange filing.
Hero said the investment, to be made through one or more tranches, will help it gain a “strong foothold in the fast-growing electric three-wheeler market, where EVs are projected to account for 35% of total sales in the near future”.
The company also said that, apart from its primary investment, it may also acquire shares from existing shareholders of Euler by way of a secondary sale. It didn’t specify who could be the sellers.
The EV maker is backed by marquee investors including the UK's British International Investment and Indian venture capital firm Blume Ventures.
In January this year, Euler raised $20 million in debt financing from European impact investor responsAbility Investments AG. Before that, in May last year, Euler raised Rs 200 crore to close its Series C funding round. Overall, it raised Rs 570 crore in the round that attracted investment from Piramal Alternatives as well as BII and Blume Ventures.
Euler was established in 2015 and has a presence across 30 Indian cities. During the financial year ended March 2024, Euler clocked revenue of Rs 172 crore, up from Rs 49 crore and Rs 25 crore in the previous two years, respectively.
Euler is not the first EV maker into which Hero MotoCorp has acquired a strategic minority stake. It owns an almost 37% stake in electric scooter maker Ather Energy after making successive investments over the years.
In December 2023, Hero invested Rs 140 crore in Ather Energy, following a Rs 550 crore investment just three months before that. Last year, Ather filed draft documents to float its initial public offering. It is likely to go public next month and could look to raise Rs 3,700-4,000 crore from the capital markets.
