Castrol India Limited has entered into Shareholders Agreement and Share Subscription Agreement with Ki Mobility Solutions Private Limited and its shareholders, for acquisition of 7.09% stake (on a fully diluted basis post acquisition) in Ki Mobility. 

 

Ki Mobility is a part of TVS group, one of the large players in the India automotive industry and houses all the recent acquisitions of the TVS group in the India automotive aftermarket. Ki Mobility is one of the leading players in the automotive service, maintenance and repair sector in India. The acquisition will be completed by January 2023, subject to the terms and certain conditions agreed between the parties.

 

This strategic investment is aimed at expanding Castrol India’s presence in the after sales service and maintenance segment. This will drive value generation on account of accelerated pursuit of service and maintenance ambition. Both Castrol and Ki Mobility will explore business and technology collaborations under this partnership, to bring transformative disruption within the currently fragmented automotive service sector and create leadership positions together with a forward focus on EV readiness.

 

Company will subscribe to Compulsorily Convertible Preference shares to be issued by Ki Mobility which will result in the company acquiring 7.09% stake in the share capital (on a fully diluted basis) of Ki Mobility, for a total consideration of Rs. 487.50 crore, as below: Tranche 1 - Subscription of 4.84% of the share capital (on a fully diluted basis post tranche 1) of Ki Mobility for a consideration of Rs. 325 crore in December 2022; and Tranche 2 - Subscription of additional 2.36% of the share capital (on a fully diluted basis post tranche 2) of Ki Mobility for a consideration of Rs. 162.5 crore in January 2023.

 

Sharing details about the collaboration, Sandeep Sangwan, Managing Director, Castrol India Limited said, “KMS has a leading automotive digital platform, myTVS which is disrupting the Indian aftermarket. Castrol’s established brand equity and nation-wide footprint in India, combined with myTVS’ digital strength will bring structure to the currently fragmented automotive service sector and also accelerate business growth for KMS. In addition, Castrol will explore business and technology collaborations with KMS to enable readiness for transition to electric mobility. Indian consumers will reap the dual benefits of trusted brands and reliable services.”

 

Cheering the joint announcement, G. Srinivasa Raghavan, Managing Director, Ki Mobility Solutions said, “This investment by Castrol India Limited is testimony to the success of our unique online-to-offline business model. Our partnership with Castrol will significantly enhance the ownership experience for customers across the lifecycle of their vehicles. Besides, the coming together of two leading players will offer numerous synergy options like scaling-up of business offerings to electric vehicles, and the potential to expand our footprint beyond India.”