TVS buys 14.78% stake in electric two-wheel startup Ultraviolette

Two-wheeler maker TVS Motor Co Ltd Thursday said it has bought a 14.78 per cent stake in Ultraviolette Automotive Pvt Ltd, a Bengaluru-based startup for electric two-wheelers and energy infrastructure.

The transaction was valued at a little over Rs5 crore, TVS said in a stock exchange filing. The company will acquire 6,750 equity shares of Rs10 each at Rs7,409 per share.

Ultraviolette was founded on in December 2015 by Niraj Rajmohan and Narayan Subramaniam, alumni of the BMS College of Engineering, Bengaluru. It aims to build an ecosystem that addresses transportation needs in an urban environment. The firm deals with designing and developing motorcycles and battery packs in order to give them a modern premium look.

It reported a total revenue of Rs3.21 lakh in 2016-17, shooting up from Rs31,570 in 2015-16.

The investment is in line with TVS's efforts to bring in clean energy technology to substitute traditional fuels.

Other firms too have seen a future in electric two-wheelers - in October 2016, Hero MotoCorp acquired a 26-30 per cent stake in Ather Energy, an electric two-wheeler firm, for Rs180 crore.

Bengaluru-based Ather unveiled its first electric two-wheeler, the Ather S340, in February, which is set to go into production soon in 2018.

TVS is developing an electric scooter code-named U218 as other two-wheeler makers such as Bajaj Auto Ltd, Honda Motorcycle and Scooter India Pvt Ltd, Mahindra 2 Wheelers Ltd and India Yamaha Motor Pvt Ltd are all set to launch electric two-wheelers in 2018, according to a report in The Economic Times.

However, experts have reportedly said lack of charging infrastructure and a difference in riding experience will hold back consumer demand for electric two-wheelers.