Natural gas company Mahanagar Gas Limited (MGL) has announced the acquisition of 30.97% shareholding in 3ev Industries, a three-wheeler electric vehicle (EV) manufacturer, for ₹960 million (~$11.56 million).

The equity infusion, which is a part of the share subscription agreement between the companies, will be made in tranches, with the first tranche expected before the end of this month.

3ev is an EV original equipment manufacturer, which is based out of Bengaluru, offers end-to-end micro-mobility solutions, including hyperlocal services such as small-parcel deliveries and freight.

The company aims to utilize the transaction proceeds to scale up production capacity to meet the increasing demand, support R&D projects, and further develop aftermarket services such as Battery-as-a-Service (BaaS).

The company’s net worth at the time of investment stood at ₹115 million (~$1.38 million), and the average annual turnover as of the financial year 2022-23 was ₹196.8 million (~$2.37 million).

CRISIL was the transaction advisor to MGL, and HDFC Bank was the transaction advisor to 3ev.

“There are substantial synergies between MGL and our growing business as an EV technology platform, not only through the accelerated adoption of EVs but critically in the emerging battery ecosystem, including 3ev’s proprietary BaaS model. With MGL’s valuable support, we see many opportunities to rapidly increase the penetration and commercialization of EVs in India and beyond,” said  Peter Voelkner, Managing Director of 3ev.

MGL is currently strengthening its core sector business while simultaneously positioning itself in emerging sectors. The company said this investment will further supplement the company’s presence in the energy value chain. “MGL can facilitate setting up of charging or swapping facilities, which can help 3ev expand its business through assured charging infrastructure to its customers,” said Ashu Singhal, Managing Director at MGL.

The transaction is subject to the fulfillment of terms and conditions specified by the companies, Mahanagar mentioned in a circular apprising the National Stock Exchange of the transaction.

This comes three years after MGL collaborated with Tata Power to explore the e-mobility segment and other value-added services of mutual interest, such as solar rooftop installations.

Recently, the Ministry of Heavy Industries enhanced the budgetary outlay of the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME-II) program from ₹100 billion (~$1.20 billion) to ₹115 billion (~$1.38 billion) to encourage India’s transition to clean mobility.