Axis Bank in partnership with GuarantCo, part of the Private Infrastructure Development Group (PIDG), has extended a loan worth Rs 1 billion guarantee to Muthoot Capital, to augment the purchase of electric two-wheelers.
GuarantCo has provided a 65 percent on-demand credit guarantee to Axis Bank for this transaction, which is part of a broader USD 200 million (INR equivalent) electric vehicle (EV) framework agreement signed by GuarantCo and Axis Bank. This framework was established to enable mobilisation of funds between USD 300 and 400 million (INR equivalent) for financing the e-mobility ecosystem in India.
This collaboration with Muthoot Capital will focus specifically on providing transport solutions to rural and non-metro regions that predominantly consist of lower income populations.
The transaction will benefit Indian companies operating within the EV ecosystem with over Rs 0.8 billion (c. USD 10 million) and expected to impact local businesses in the supply chain, such as equipment manufacturers, vehicle dealers and insurers.
This is GuarantCo and Axis Bank’s third transaction under the EV framework agreement. In December 2023, it had first enabled an Rs 2.5 billion (c. USD 30 million) loan to Vivriti Capital for supporting the company’s expansion strategy in the e-mobility ecosystem of India, and subsequently extended Rs 1 billion (c. USD 12 million) loan to Everest Fleet for the purchase of electric cars to be deployed as low pollution emitting taxis in India.
Rajiv Anand, Deputy Managing Director at Axis Bank said, “We have proactively scaled up our partnerships and engagements with EV dealers, manufacturers, and other players and will continue to do so.”
Mathews Markose, Chief Executive Officer at Muthoot Capital said, “This funding will enable MCSL to provide innovative and tailor-made financing options aimed at making electric vehicles more accessible and affordable to a wide range of consumers and businesses.
We look forward to enabling the common man to own their own two-wheeler ensuring affordability and convenience. This will lend wings to our slated objective of growing our EV by 200 crores during FY25.”