Tube Investments proposes to put money into rising tech start-ups

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Murugappa Group’s engineering firm Tube Investments of India (TII) will provide ₹ 25 billion to invest in emerging technology startups as part of its strategy to develop new revenue streams and growth opportunities.

TII plans to invest in startups in the fields of electric vehicles, power generators, alternative fuels, environmental sustainability, energy storage systems, Internet of Things (IoT), medical devices, smartphone components, driver assistance systems (ADAS) and micro-grids, among others.

The proposals are currently in various stages of evaluation. Once the opportunities are complete, the company will invest in these startups.

The company is looking for various startups that are engaged in active, innovative and out-of-box research in technology areas with the potential to deliver cost effective and cleaner technological solutions and to be integrated as part of existing ones or as new lines of business of the company, according to the information in the invitation to the 39th annual general meeting of the company.

Shareholders nod

For this, the company will obtain the approval of the shareholders. The company’s board of directors believes it is imperative that TII participate in emerging technological trends in order to continue on its growth path and improve profitability.

TII will also seek shareholder approval to sell ₹ 2 billion in Watsun Infrabuild Pvt Ltd. to invest, from which the company currently purchases wind / solar energy for its business needs under a company-owned electricity purchase agreement. With the increasing demand for its products, the company has estimated an additional electricity requirement, which it would like to obtain from Watsun in view of the cost advantage. However, self-consumers can only consume electricity from a self-generation plant in proportion to their participation in the generator. The company has so far invested 1.06 billion in Watsun’s share capital.

Thus, the planned investment of 2 billion in Watsun is expected to source additional electricity in the future, in accordance with government norms.

Growth model

In the meantime, TII has devised a three-engine growth model that includes an organic and inorganic strategy and a focus on neighborhoods.

“With our 3-engine growth model, ie TI-1, which encompasses our core, an organic business in which we are currently active, we have formulated a clear growth path and use it as a sustainable growth engine and free cash flow generator, TI-2 “This includes our new entry-level and frontier businesses such as optical lenses, EV tricycles, etc. and TI-3, which would focus on inorganic growth through acquisitions without impacting the balance sheet,” Vellayan Subbiah, Managing Director of the company, it says in the annual report.