Zelio E-Mobility is set to raise Rs 168 crore via equity and warrants to fund a new three-wheeler plant in Haryana and expand its dealer network. The move aims to increase production capacity to meet growing demand. Shareholders will vote on the proposal at an upcoming meeting on October 20.
Zelio E-Mobility, a manufacturer listed on the BSE SME platform, has announced plans to raise Rs 167.96 crore to fuel its expansion in the electric vehicle market. The company will issue equity shares priced at Rs 853 each to institutional investors, including Motilal Oswal Financial Services and Calliope Capital Advisors. Additionally, the company’s promoters—Niraj Arya, Deepak Arya, and Kunal Arya—will invest further capital through convertible warrants, showing their direct participation in the company's funding round.
The funds are primarily directed toward building a new electric three-wheeler manufacturing unit in Patan, Haryana. This expansion is part of the company's broader strategy to increase its production capacity beyond the current 2.4 lakh units, a target reached after the recent setup of its Coimbatore facility. The management has set an aggressive goal to increase its dealer network from the existing 400 outlets to over 550 by the end of the 2027 financial year.
Financially, Zelio has reported strong growth, with standalone revenue jumping 76% to Rs 303.54 crore and a profit after tax of Rs 28.03 crore in the last fiscal year. However, investors often view such expansion plans with caution, particularly in the EV sector. The electric vehicle industry remains highly competitive and sensitive to changes in government subsidy policies, which can significantly impact demand and profit margins for manufacturers.
For an SME-listed company, scaling operations comes with execution risks. While the promoter participation through warrants provides a degree of confidence in the company’s long-term direction, the actual benefit for shareholders will depend on the successful completion of the new plant and the ability to maintain profitability amidst stiff competition from both established players and new entrants.
The capital raise proposal will head to an Extraordinary General Meeting scheduled for October 20. Shareholders will monitor whether the company can maintain its current growth momentum while managing the financial pressures of high-speed scaling in a capital-intensive sector.