Greaves says Rs 331 crore rights issue funds GEML growth

Greaves invested Rs 331 crore in GEML’s fully subscribed rights issue in Q2 FY27, and management said the capital leaves the electric-mobility business well funded as it expands volumes and moves toward breakeven. GEML’s Q2 FY27 revenue rose 106% year on year to Rs 410 crore, while its reported loss narrowed to Rs 25 crore from Rs 42 crore.

How much did Greaves invest in GEML?

Greaves invested Rs 331 crore in GEML’s rights issue during Q2 FY27. It also invested Rs 112 crore to acquire the remaining 20% stake in Excel Controlinkage, taking the two disclosed capital-allocation transactions to Rs 443 crore during the quarter.

Management said the GEML investment and the Excel Controlinkage acquisition aligned with its strategic priorities. It added that it would continue to evaluate partnerships and selective inorganic growth, while considering strategic relevance, sustainable returns and returns on deployed capital.

The call did not provide a separate use-of-proceeds schedule for the Rs 331 crore invested in GEML. However, when asked about a potential initial public offering, or IPO, management said the rights equity was completely subscribed and that GEML was well funded.

Why does Greaves say GEML is well funded?

Greaves says GEML is well funded because the rights equity has been fully subscribed while the business’s operating loss and cash burn are declining. Management said monthly cash burn in the electric two-wheeler business had reached a record low and that the business should reach breakeven fairly soon, without specifying a date.

GEML has manufacturing capacity of about 40,000 units a month, with utilisation reaching about 40% at the time of the call. That indicates output of roughly 16,000 units a month at the reported utilisation rate, and management said existing capacity should cover the next couple of years at the current rate of volume growth.

Management did not disclose a numeric estimate of remaining cash burn, a funding horizon or a required breakeven volume. It said that, based on the latest month-on-month volume trend, GEML should achieve breakeven significantly ahead of its earlier internal plan.

How did GEML’s Q2 FY27 financial performance change?

GEML’s Q2 FY27 revenue more than doubled and its reported loss narrowed by Rs 17 crore from the prior-year quarter. Management attributed the operating improvement to higher scale and an improving unit-economics trajectory in electric two-wheelers.

Electric two-wheeler revenue reached Rs 350 crore in Q2 FY27, up 134% year on year, while L5 electric three-wheeler revenue was almost Rs 60 crore, up 55%. Electric two-wheeler volumes exceeded 37,000 units, up 114%, and L5 volumes were nearly 2,800 units, up 61%.

Electric two-wheeler earnings before interest, tax, depreciation and amortisation, or EBITDA, loss per unit fell 70% in Q2 FY27, from about Rs 20,000 to less than Rs 6,300. Average realisation improved by Rs 5,000 to roughly Rs 93,000 per unit, which management said occurred without compromising volumes.

Greaves’s consolidated Q2 FY27 revenue increased 44% to Rs 1,176 crore from Rs 815 crore, and consolidated EBITDA margin rose sequentially to 6.2% from 5.8% in Q1 FY27. In contrast, the Core Business EBITDA margin fell to 11.5% from 14.8% a year earlier amid commodity inflation and delays in passing higher costs to customers.

What is intended to bring GEML to breakeven?

GEML is pursuing breakeven through volume growth, higher realisations, dealer expansion, product additions and cost reduction. Management said its network issued letters of intent for 160 new dealerships in H1 FY27, while existing dealers opened nearly 20 additional branches.

Average dealer throughput increased almost 40% year on year, rising from 18 to 25 units a month. Electric two-wheeler registrations on VAHAN, the vehicle-registration database, rose 107% year on year to about 53,700 units in H1 FY27, while market share increased to 4.8% from 4.1% in H1 FY26.

GEML’s business-to-business volumes grew 18% year on year in H1 FY27, supported by multiple new fleet accounts. Management also said e-commerce platforms generated nearly three times the volume growth recorded in the same period a year earlier, while reducing dependence on any single customer was a stated objective.

Product features are another stated lever for realisation and margins. Management said Internet of Things, or IoT, solutions and accessories generate higher margins and incremental realisations, while the new Nexus EX Plus has a 5-kilowatt motor and the Magnus G Max offers more than 30 connected features through the Ampere Connect application.

What technology and pricing actions could affect GEML’s progress?

GEML plans to deploy an in-house ferrite-assisted synchronous reluctance motor in its two-wheeler portfolio soon, followed by new product introductions in Q4 FY27. The company said the motor does not use rare-earth materials, lowering dependence on imported rare-earth minerals from China and increasing powertrain localisation.

Management said the new motor delivers better performance metrics and a cost reduction compared with a traditional rare-earth motor, but did not quantify either benefit. The company’s design registration covers the motor architecture, which is intended to be introduced first in two-wheelers before subsequent product launches.

At the group level, Greaves began implementing price increases in parts of the Core Business during Q2 FY27 to address higher aluminium, iron, copper and platinum group metal costs. Management expects the full company-wide effect of these pricing measures by Q4 FY27 because business-to-business and original-equipment-manufacturer pricing arrangements operate with a lag.

GEML’s operating progress also followed brand and network activity. Ampere’s website traffic nearly doubled to 2.1 million in H1 FY27 from 1.1 million a year earlier, while September 2026 brand searches were 23.6% above August 2026, according to management.

What is the status of GEML’s IPO?

GEML’s IPO has no announced timetable. Management said the IPO committee was monitoring market conditions and the likely trajectory of enterprise valuation, and would select the timing because the fully subscribed rights equity meant GEML was currently well funded.

Greaves recorded a one-off expense linked to the planned GEML IPO in Q2 FY27, although the transcript did not quantify that component separately. The group also recorded Rs 27 crore of accelerated depreciation and a Rs 33 crore exceptional item following a review of brands, goodwill and other intangible assets.

The absence of a dated IPO plan means the next disclosed operational milestones remain more immediate. These include a further rise in capacity utilisation from about 40%, the unspecified breakeven point management expects fairly soon, and the planned Q4 FY27 product introductions using the new motor.

Conclusion

Greaves has committed Rs 331 crore to GEML through a fully subscribed rights issue while the EV business expands revenue and reduces operating losses. GEML’s Q2 FY27 revenue of Rs 410 crore was more than twice the prior-year level, and its reported loss narrowed to Rs 25 crore from Rs 42 crore as electric two-wheeler scale, realisations and loss per unit improved.

The next measures to watch are whether GEML can lift utilisation from about 40% of its 40,000-unit monthly capacity, reach the breakeven point management says is fairly soon, and convert planned Q4 FY27 motor-led products into additional volume or cost benefits. Management has also kept the IPO process open, but disclosed no date because it is assessing market conditions and enterprise valuation.