Shares of Greaves Cotton surged 8% on Tuesday, December 24, 2024, after its subsidiary, Greaves Electric Mobility, filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), signaling its intent to raise ₹1,000 crore through an initial public offering (IPO).
Greaves Electric Mobility Sets Stage for IPO
Greaves Electric Mobility, a key player in the electric vehicle (EV) sector, has filed its DRHP with market regulators, indicating that the company is preparing for a public listing. The move is part of the company’s strategy to raise funds to further expand its business and capitalize on the growing EV market in India.
The upcoming IPO will consist of a fresh issuance worth ₹1,000 crore, as well as an offer-for-sale (OFS) from existing shareholders. Greaves Cotton, the parent company, plans to sell up to 51 million shares, while Abdul Latif Jameel Green Mobility Solutions DMCC will offer up to 138.4 million shares.
For Greaves Electric Mobility, this IPO marks a significant step in its expansion. The company intends to use the funds raised to ramp up its research and development efforts, enhance manufacturing capabilities, and develop battery assembly infrastructure—all of which are vital to its long-term growth in the electric vehicle market.
Greaves Cotton’s Strong Stock Performance
Greaves Cotton’s shares climbed as much as 8.44% to ₹248.7 per share on the National Stock Exchange (NSE) in the early trading session. By 10:33 AM, the stock remained strong, up by 7.61%, trading at ₹246.80 per share.
The surge in stock price reflects investor optimism surrounding Greaves Electric Mobility’s IPO filing. As one of the most notable players in the EV space, the company’s upcoming public listing is expected to garner significant attention from investors looking to capitalize on India’s rapidly expanding electric vehicle sector.
This increase in Greaves Cotton’s stock price also highlights the growing market interest in EV-related businesses, which are seen as the future of transportation in India. Investors are eagerly anticipating more details about the IPO, which could potentially drive further market movements in the coming weeks.
Key Highlights from the Greaves Electric Mobility IPO Filing:
- Amount to be raised: ₹1,000 crore through fresh issuance.
- Offer for Sale (OFS): Up to 51 million shares by Greaves Cotton and up to 138.4 million shares by Abdul Latif Jameel Green Mobility Solutions DMCC.
- Purpose of Funds:
- To fund product research and development.
- To expand manufacturing capacity.
- To develop and enhance battery assembly capabilities.
The Growing Electric Vehicle Market in India
India’s electric vehicle (EV) sector has been rapidly gaining momentum as the government ramps up initiatives to promote cleaner, more sustainable transportation. As more consumers opt for electric vehicles, companies like Greaves Electric Mobility are well-positioned to capitalize on the shift toward eco-friendly transportation solutions.
Greaves Electric Mobility’s product line includes a variety of electric two-wheelers and three-wheelers, which have seen growing demand across urban and rural markets in India. The company’s ability to scale up production and develop cutting-edge battery technologies will likely be crucial to its success as it navigates the competitive landscape of the EV industry.
What’s Next for Greaves Cotton and Its Investors?
The filing of the DRHP is just the beginning for Greaves Electric Mobility’s IPO journey. Over the coming months, the company will likely release more details about the offering, including the price band and the timing of the share sale. Investors will be closely watching these developments, especially as the EV sector continues to evolve and attract attention from both domestic and international players.
For Greaves Cotton, the IPO of its subsidiary is expected to not only unlock significant value for shareholders but also provide the funding needed to support its ambitions in the EV sector. As the company pushes ahead with its growth plans, it will be interesting to see how the market reacts to the IPO and whether it can successfully position itself as a leader in India’s EV revolution.
