‘The future is electric’ is becoming a larger and more uncontested truth as time passes. When any industry goes through a transformation of this scale, usually incumbents face a period of suffering, and new players throw out tempting opportunities.
All eyes globally have been on the four-wheeler space. The most limelight is usually grabbed by the likes of Tesla, which now has a market cap higher than the next 10 automakers combined; or even BYD from China, which has been a strong contender for the global top-spot in EVs.
In India, while no one new player has made a mark in the four-wheeler EV space, there are great examples emerging in the two-wheeler space. Despite all the infamy, Ola Electric has grabbed the top spot, with a 44% market share now, leaving TVS at a far second with a 17% share.
Even more buzzing is the three-wheeler space, which is the sub-segment in EVs with the highest number of players - 530 companies. While the number is eye-popping, this space is also the one with the highest penetration - with EVs making up for 50% of all three-wheeler sales now.
In this often overlooked but promising area is a player called Montra which has grabbed the 23rd position within a short span of 12 months from launch. The fact that it is a new entrant, but also backed by a very strong parentage adds to the chances of its success.
And that’s where we smell opportunity!
Montra - Unknown, But Rising Fast
Montra was launched just last year, and since its debut it has been creating waves, especially in South India, where it captured significant market share. In August 2024, it announced the delivery of its 5,000th passenger auto, with monthly sales touching 597 vehicles.
While this still makes its monthly sales at a tenth of the market leader Mahindra, the underlying dynamics are changing fast. The company has been guiding to reach 1,000 vehicles per month in as soon a couple of months, which will further push it up on the leaderboard.
To further tap into the market and accelerate growth, Montra has aggressive expansion plans in place:
Expanding dealer network from 70 right now, to 150 by the end of the year
Launching a cargo version of the current e-auto
Launching an e-rickshaw (which has a capacity of 4-6, versus e-autos which have a capacity of 2-3)
The product itself has been superior, compared to the rest of the market.
Parameter | Montra | Mahindra | Bajaj | Piaggio |
Price | Rs. 3.02 lakh | Rs. 3 lakh | Rs. 3.76 lakh | Rs. 2 lakh |
Category | D+3 | D+3 | D+3 | D+3 |
Model | Super Auto ePV | Treo | RE E-Tec 9.0 | Ape E-City |
Real World Range | 118 km | 110 km | 178 km (not real world) | 145 |
Top Speed | 55 kmph | 55 kmph | 45 kmph | 50 kmph |
Peak Power | 10 kW | 8 kW | 4.5 kW (continuous) | 5.44 kW |
Peak Torque | 60 Nm | 42 Nm | 36 Nm | 29 Nm |
Battery Capacity | 7.66 kWh | 7.37 kWh | 8.9 kWh | 8 kWh |
Charging Time | 4h | 3h 50min | 4h 30min | 3h 45min |
Additional Features | High-Power Halogen Lights, Superior Cushioning. | Comfort, advanced safety. | On-board charger, Tubeless Radial Tyre. | Boost Mode |
Will it Succeed?
While Montra ranks 23rd in overall three wheeler EV sales, it has a presence only in e-autos. Most of the top players are either
Incumbents like Mahindra, Bajaj and Piaggio, with a whole range of products - e-autos, e-rickshaws and cargo variants, or
Regional players, focused on e-rickshaws (4-6 people)
Montra has started with the relatively less intense market of e-autos, and can disrupt the e-rickshaw market thanks to a better brand, larger network, superior product, integrated manufacturing, and enhanced after-sales capabilities.
Montra’s parentage is the key reason for its potential to successfully break the market:
Lower entry barrier - Montra is part of TI Clean Mobility (TICMPL), which is a subsidiary of Tube Investments of India, which is a jewel in the crown of the Murugappa Group. The trust factor that the Murugappa Group brings on the table, especially in South India helps with lowering entry barriers
Exceptional business sense - Tube Investments of India, over the last few years has shown an exceptional ability to acquire businesses in completely new areas from its core business, and turn around them. A legendary example is that of CG Power, which the returns of do all the speaking!
Capital adequacy - Capital constraints are a relatively smaller problem for Montra given its parentage. Tube Investments of India has invested Rs. 250 crore into TICMPL as equity, and Rs. 500 crore as CCPS (Compulsorily Convertible Preference Shares), and further raised Rs. 2,250 crore from PE players (primarily Multiples) through CCPS
Capabilities - Tube Investments of India has been a leading engineering company - expertise which helps immensely in entering the automotive business, and scaling it up. It is one of the largest manufacturers of precision tubes, transmission chains, metal-formed products and components and gears
More than Just 3 Wheeler EVs
While we’ve been raving about Montra so far, TI Clean Mobility (the subsidiary of Tube Investments of India) has more in the pipeline than just three-wheelers:
Category | Description | Plans |
Electric Tractors | Launched India’s first electric tractor | Will target launch in 4 states - Gujarat, Maharashtra, Karnataka, Tamil Nadu |
Electric M&HCV | Launched India’s first Electric Heavy Commercial Vehicle | Starting with a 6x4 heavy-duty truck trailer, but will expand product portfolio with new offerings |
Electric SCV | Invested Rs. 160 crore in setting up a company to make Electric Small Commercial Vehicles | Slated for market introduction in 2QFY25 |
While this may seem like a lot, Tube Investments has been sowing the seeds for building capabilities since the last few years, by acquiring various entities:
Aerostrovilos - Micro gas turbines to increase fuel efficiency in EVs
Cellestial E-Mobility - Electric tractors
IPL Tech Electric - EV system design and manufacturing for MHCVs
Jayem Automotives - Design, development, testing and manufacturing of automotive components, systems and prototypes
In the Grand Scheme of Things
For FY24, the EV companies of Tube Investments together made a revenue of Rs. 206 crore, which makes up for just a little over 1% of the total revenue of Tube Investments of India. On this, it makes a net loss of Rs. 270 crore.
While these numbers seem very small from the overall Tube Investments of India perspective, it is from a business which has just completed one year. So far, the company has focused on setting base - acquired companies, set up four manufacturing plants, and launched four products.
But the small base, presence in multiple categories, and initial success have the potential to make this business much larger. The beauty of the business also lies in the fact that its new-age and transformational nature give it much higher valuations.
Already, Tube Investments of India has raised more than Rs. 3,000 crore for the EV operations, valuing the company at a much higher unknown amount. The valuation will only go higher as the company scales its operations in terms of products, segments and geographies.
Multiple New Bets
Other than EVs, Tube Investments of India has also been making investments to enter other high-growth industries with a long growth runway including:
CDMO for APIs in the pharma industry
Manufacturing of medical consumbales
Semiconductor assembly and testing
It has been utilising strong cash flows from its core businesses of cycles, engineering and metal-formed products in order to either acquire or set up new businesses, which are small at the moment, but have the potential to scale up massively over the next few years.
Whether Tube Investments of India is able to replicate the success of its acquisition turnaround, in entering new businesses is yet to be seen. However, early signs, especially on the short stint of Montra definitely seem very encouraging.
So the next time you see a fancy looking white EV auto on the roads, it’s perhaps time to think about the legacy Tube Investments of India has created, and can continue creating!
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