TI Clean Mobility Agrees to Acquire Stake in IPL Tech for Rs. 246 crore

(Representative image)

TI Clean Mobility, a unit of Chennai-based Murugappa Group’s Tube Investments, has executed definitive agreements to acquire a stake of about 65% in electric heavy commercial vehicle company IPL Tech Electric.

The acquisition is being done through a combination of primary and secondary purchase of shares for a total consideration of about Rs. 246 crore.

The cost comprises of two components. About Rs 96 crore will go towards the purchase of 5,380 equity shares from the founders and other shareholders of IPL Tech. Up to Rs. 150 crore will go towards a subscription to 8,456 equity shares of IPL Tech.

In all, TI Clean Mobility proposes to acquire 13,836 equity shares of IPL Tech representing 65.2% of its equity share capital.

The acquisition is expected to be completed on or before October 2022, subject to the completion of the conditions cited in the agreements executed between the parties.

The proposed acquisition is consistent with the objective of TI Clean Mobility to broaden its product and business portfolio to reduce its dependence on existing revenue streams.

According to a company filing with the stock exchanges, IPL Tech has issued and paid up equity capital Rs 1.28 lakh. And, its unaudited turnover for FY 2021-22 was Rs. 13 crore.

The subscription to equity shares of IPL Tech will fall within the meaning of a related-party transaction, Tube Investments informed the stock exchanges.

Arun Venkatachalam (0.5%), Shambho Trust (2.7%), and  Vellayan Subbiah (6.2%) hold shares in TI Clean Mobility.

“The proposed related party-transaction viz., primary infusion into the company, is at arms' length basis based on valuation. None of the said related parties will participate in the proposed transaction as a seller, buyer or subscriber to equity shares” of IPLT,” a Tube Investments note said.

IPL Tech is a start-up formed in 2019 to make electric heavy commercial vehicles. The first offering of IPL Tech, RHINO 5536, is designed to run-on all-weather condition roads.

“The acquisition of IPL Tech will help expand our footprint in the clean mobility space and give us a first-mover advantage in this segment. We have taken another important step to further our vision of improving quality of life through eco-friendly mobility solutions and to drive our ESG goals,” said M.A.M. Arunachalam (known as Arun Murugappan), chairman of Tube Investments.