By Swati Khandelwal, CNBC-TV18

After its break-up with UK’s Ultra Motors Hero Exports is on an acquisition drive. The company is looking at a Chinese electric motor company and the deal should be done in the next 3-5 months. The company has a Rs 100 crore expansion plan.

After parting ways with UK’s Ulltra Motors, Hero Group company- Hero Exports-is looking at acquiring an Indian or Chinese electric motor manufacturing facility. Hero has earmarked Rs 20 crore for the acquisition to be partly funded through internal accruals and loans.

The company will also invest around Rs 80 crore in its manufacturing plant in Ludhiana and develop its R&D facility. Hero Exports makes the vehicle chassis for Hero Maxi and Hero Optima- two of its largest selling e-bikes. Post its split with Ultra, the electric motors for these vehicles are being imported from China.

“We are evaluating various options: either go and acquire a motor controller manufacturing facility in India or abroad. We are talking to a couple of players. We should be able to finalize in 3-5 months and indigenisation of technology will take 8-10 months,’ said Naveen Munjal, CEO, Hero Electric.

The company has doubled up its daily production capacity from 220 units to 440 units across two shifts. With the improved capacity, Hero Exports is targeting sales of 70,000 units this year versus 21,000 units it sold last year. The company already has 7 products on the road and plans to launch 4 more this year, of which 2 will be high-speed vehicles. Surprisingly, the recent excise duty waiver on electric vehicles has industry wanting more.

“We are writing to the Finance Ministry to include scraps too for duty waiver. That will be a relief,” added Naveen Munjal.

Hero Electric has established a high-tech R&D cell at Ludhiana and Delhi to develop and produce indigenous EV  motors within one-year to suit both high-speed and low-speed vehicles.