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SoftBank Vision Fund, Sun Mobility in talks for $100 million investment

LiveMint logoLiveMint 19-09-2017 Swaraj Singh Dhanjal

Mumbai: SoftBank Vision Fund, the $100 billion technology investment fund of Japan’s SoftBank Group, is in early talks to invest as much as $100 million in Reva Electric founder Chetan Maini’s latest venture Sun Mobility, said two people aware of the development.

Sun Mobility is a joint venture between Chetan Maini’s Virya Mobility 5.0 and Khemka family’s Sun Group, which has investments across sectors such as energy, mining and real estate.

Sun Mobility is developing smart batteries for a wide spectrum of electric vehicles including cars, buses and scooters. The company also plans to develop a network of renewable energy-powered battery-charging stations.

“Electric vehicles have suddenly caught the attention of all major car makers and non-car makers as well in India. The roads and transport minister recently said that the Indian automobile industry has to move towards electric vehicles or be ‘bulldozed’. The opportunity in India is expected to be huge and given his track record and understanding of the sector, investors are keen to back Chetan Maini,” said one of the two people cited above, requesting anonymity as the talks are private.

However, he added that the talks with SoftBank are at an early stage and that they might not necessarily result in an investment.

“We do not comment on any discussions with investors,” said Chetan Maini in an email response to queries regarding talks with SoftBank. A spokesperson for SoftBank said that the firm does not comment on speculation.

Interest in the electric car space has seen a sharp rise this year as several major Indian conglomerates, which do not have automobile manufacturing businesses, have announced plans to enter the space directly or through ancillary businesses such as storage/batteries.

In January, Sajjan Jindal led JSW Group, which has interests in steel and infrastructure, said that it plans to enter the electric cars business by 2020.

The Mumbai-based group will set up the electric vehicle business on its own and initially buy batteries from suppliers, chairman Sajjan Jindal, 57, said in an interview with BloombergQuint at the World Economic Forum (WEF) in Davos. The group would consider setting up a joint venture for making batteries in the longer term, Jindal said.

Mukesh Ambani-controlled Reliance Industries Ltd is planning to set up a factory to produce lithium-ion (Li-Ion) batteries of 25 gigawatt-hours (GWh) capacity, reported online portal Factor Daily.

Mint reported in July that RIL is considering a plan to enter retailing of liquefied natural gas and setting up of charging stations for electric vehicles at its petrol pumps.

In April, Suzuki Motor Corp., parent of India’s largest car maker Maruti Suzuki India Ltd, announced that it would form a joint venture with two other Japanese firms, Denso Corp. and Toshiba Corp., to produce lithium-ion batteries for electric vehicles in India.

The initial capital expenditure will be 20 billion Japanese yen (around $184 million).

With the Vision Fund, India is back on the radar for SoftBank. The fund has so far made two bets in India.

In August, SoftBank Vision Fund bought a stake worth at least $2.6 billion in Flipkart Ltd. The latest round of funding takes Flipkart’s cash reserves to more than $4 billion, Mint reported, adding that SoftBank invested roughly $1.4 billion directly in Flipkart, and the rest to buy stakes from some existing investors.

Earlier this month, hotel aggregator Oyo (Oravel Stays Pvt. Ltd) raised $250 million in a funding round led by SoftBank Vision Fund.

“There is a global trend of moving towards electric vehicles and some large western automakers have made commitments to go completely electric vehicle. In India the government seems to be pushing electric vehicles. This of course will generate need for the whole ecosystem of components, batteries and charging stations to evolve and hence we are seeing a strong interest from several corporates to enter this space,” said Harish H.V., partner at Grant Thornton India.

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