According to sources in the know, the company is attempting to raise ₹300 crore from existing backer GII and tie up the remaining funding of about ₹250 crore in the form of debt for which it has tapped the credit fund arms of Edelweiss and Kotak. Hero Electric has offered to provide a land parcel in Gurugram as security to potential financiers.
Gulf Islamic Investments declined to comment when contacted. Kotak and Edelweiss did not respond to ET’s queries. Hero Electric did not respond to queries till press time Friday.
The development comes at a time when Hero Electric has been facing pressure on operations with the Ministry of Heavy Industries stalling disbursal of subsidies under FAME II (Faster Adoption & Manufacturing of Electric Vehicles) in FYFY22 after receiving anonymous emails alleging that several firms including Hero Electric were claiming subsidies under the scheme without meeting the Phased Manufacturing Plan norms meant to increase indigenisation, investments and employment in India.
The company has since been found violating localisation guidelines in investigations carried out under the directive of MHI and been asked to refund more than ₹100 crore they had wrongfully claimed in subsidies, along with interest. It has denied any wrongdoing.
In all, the government sent recovery notices totalling ₹469 crore earlier this fiscal to eight companies – Hero Electric, Ola Electric, Okinawa Autotech, Ampere EV, Revolt Motors, Benling India, Lohia Auto and Amo Mobility – for allegedly violating local sourcing norms. Of this, Revolt and Ampere have refunded the subsidies they had claimed wrongfully under the scheme to the Centre.
