Tube Investments proposes to invest in emerging tech start-ups

G Balachandar Chennai | Updated on July 21, 2021

Vellayan Subbiah, Managing Director

Earmarks a sum of ₹25 crore

Murugappa Group’s engineering company Tube Investments of India (TII) will earmark a sum of ₹25 crore for investments in start-up companies in the emerging technology space as part of its strategy to develop new revenue streams and growth opportunities.

TII plans to invest in start-ups engaged in fields of electrical vehicles, power generators, alternative fuels, environmental sustainability, energy storage systems, Internet of Things (IoT), medical devices, smartphone components, advanced driver assistance systems (ADAS) and micro-grid, among others.

At present, the proposals are at various stages of evaluation. Upon the opportunities getting finalised, the company will invest in those start-ups.

The company is looking at various start-ups which are into active, innovative and out-of-box research in areas of technology, with the potential to deliver cost effective and cleaner technological solutions and can be assimilated and integrated as part of the existing or as new lines of business of the company, according to the details in the notice of the company’s 39th annual general meeting.

Shareholders’ nod

The company will be seeking shareholders’ approval for the same. The company’s board is of the opinion that it is imperative that TII participates in emerging technological trends in order to continue firmly in the growth path and improve profitability.

TII will also seek shareholders’ approval to invest ₹2 crore in Watsun Infrabuild Pvt Ltd, from which the company currently sources wind/solar energy for its business requirements, under a captive power purchase agreement. With the growing demand for its products, the Company has estimated an additional requirement of power, which it proposes to source through Watsun in view of the cost advantage. However, captive users can consume power from a captive generating plant only in proportion to their shareholding in the producer. The company has so far invested ₹1.06 crore in Watsun’s share capital.

Thus, the proposed investment of ₹2 crore in Watsun is to source additional power in future, in accordance with the government norms.

Model of growth

Meanwhile, TII has worked out a three-engine model of growth plan which includes organic and inorganic strategy and focus on adjacencies.

“We have articulated a clear growth path with our 3-engine model of growth i.e. TI-1 comprising our core, an organic business which we are in at present, building it as a sustainable growth engine and free cash flow generator, TI-2 which would include our new step-outs and frontier businesses such as optic lens, EV three-wheelers, etc., and TI-3 which would focus on inorganic growth through acquisitions without stressing the balance sheet," Vellayan Subbiah, Managing Director of the company, said in the annual report.

Published on July 21, 2021

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