New Delhi: Electric scooter maker Hero Electric has raised ₹ 160 crore from Mumbai-based Alpha Capital to build its second factory, develop new products and expand dealer network on hopes that local demand for its eco-friendly products will nearly double in the next few years, said a top company executive.

This is the maiden fund raising for Hero Electric from outside the New Delhi-based Munjal family, said managing director Naveen Munjal, pointing to the need for external funds to sustain the growth in business. The Munjal family controls Hero MotoCorp Ltd., the country’s largest two-wheeler maker.

“As of now, Alpha Capital will have a minority stake in the company and with this round of funding, we will be fine for a year. Alpha is also interested in investing further in Hero Electric in the next few years," Munjal said in an interview on Monday.

Hero Electric has a factory at Ludhiana in Punjab. It is currently in the process of building a plant in South India to tap growth opportunities there.

Munjal expects Hero Electric to sell about 50,000 electric scooters in 2018-19, up from 31,000 in the last fiscal year. In 2019-20, the company is expected to sell 80,000-85,000 scooters.

With the Union government urging electric vehicle makers to shift from lead-acid batteries, the company has introduced lithium-ion batteries in all its products and is testing locally-made batteries to boost localization.

“We are trying to increase our localization content with every passing year. We are in touch with a lot of battery and other component manufacturers of electric vehicles in India. As of now, our intention is to double our dealer network and invest in product development for the future," said Munjal.

On achieving break-even, Munjal said Hero Electric is in the phase of developing new products and building scale of operations. “As and when electric vehicles will gain in scale, profitability will improve automatically," he said.

Hero Electric has 450 touch points across the country, which includes dealers and sub-dealers in rural areas.

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