We want to become a one-stop solution for all EV components: Akash Minda

Auto components major Minda Corporation has made a spate of acquisitions and entered into joint ventures in the past 12-18 months. With a major future focus on electrification, Minda Corp has recently acquired 100 per cent ownership in its EV components subsidiary, Spark Minda.

These moves are aimed at further advancing its core products as well as getting ready for the upcoming technological transformations in the auto space.

Against this backdrop, Minda Corporation Executive Director Aakash Minda sat down for an exclusive interview with BusinessLine to share details of the company’s expansion strategy. Excerpts:

In the past 12-18 months Minda Corporation has announced 4 major partnerships. Can you tell us what will be the focus of your expansion in the future?

In the last 12 months, we have closed four partnerships. We partnered with Ride Vision from Israel for a two-wheeler ride attached system. We entered into a joint venture with INFAC Elecs of Korea for antenna technology. We acquired 26 per cent stake in EVQPOINT, EV solutions from Bengaluru.

Then there was the sale of a minority stake of Stoneringe Inc in Minda Stoneridge Instruments Ltd to Minda Corp. Going forward, our focus is partnerships and alliances including mergers and acquisitions (M&As). Within these M&A or alliances, we will be focusing on three aspects.

One is looking at partnerships in our own product lines to make them stronger and technically advanced. And therefore, make our legacy products such as the keyless entry wiring harnesses or even clusters stronger.

The second pillar is looking at the new product lines in terms of EV or in terms of the products which are non-legacy, or new products for Minda. For example, the ADAS systems, EV tech, connected cars, autonomous tech, auto electrification and electronification technology. The third pillar of this is the M&A. Now, we are doing a lot in all of these three pillars.

Which are the companies you will be looking at to enter into alliances, particularly for making components in the EV space?

We will not be able to share the specifics on that, but I can tell you that Minda Corporation has had a three-fold approach.

We have a three-by-three strategy when it comes to EV. Which is to make products for under three-wheelers, for under three-kilowatt products and into the three product lines- battery management systems, motor controllers as well as the power electronics aspect. We won’t be looking at anything else.

This is the blueprint and accordingly we are speaking with various partners. I would like to highlight that when the world was talking about ICE (internal combustion engine) or BS (Bharat Stage)-VI, we laid the foundation in our Technical Center for EVs.

We hired engineers, and now we have a strength of about 40 engineers, only working on EV technology, which is homegrown from Minda Corporation. So, now all the partnerships and alliances that we are looking at are going to, you know, add to our competency and capability to reduce the timeline and product offering to the market.

So, time to market and affordability would be our important focus. Our focus is to have our own team and then have alliances in that respect. So, we are in discussion. Of course, things have to mature. Until the definitive agreement is signed, I really cannot tell you more.

How will you bankroll these partnerships?

So, we did a QIP about four years ago. We raised about ₹350 crores to ₹400 crores. That money is still kept aside for inorganic growth and alliances. That money is still not utilized in our ongoing business operations. So, this money will be our war chest for all our acquisitions and alliances for inorganic growth.

Additionally, we are a net zero debt company. So, we have more cash in our balance sheet and of course, we may look at other sources also when it comes to acquisitions and alliances, but we have a very healthy and strong balance sheet which will also come in aid.

In addition to the ₹400 crore QIP, you also committed publicly that you will invest $100 million in the next three years into your Corp. Can you give us an exact breakup of how the investments will pan out in the future?

Of the ₹400 crore QIP, so far we have spent ₹80 crores for our acquisition of Stoneringe Inc’s minority stake in Minda Stoneridge Instruments Ltd. We may definitely use the fund for other acquisitions and joint ventures that may come up going forward.

The $100 million is something that will be part of our overall CAPEX, which includes new plants, or the technology aspect. Those investments are keeping in view the PLI scheme, R&D initiatives, among others.

So, yes, we are committed to those numbers definitely. But of course, this is a mixed bag right now. So, some of them are regular maintenance expenditure, CAPEX, disruptive technology and advanced electronics, M&A, etc. The numbers can go higher given a good opportunity.

What is your strategy in the EV space?

Our strategy in electrification is two-fold. First is to disrupt the market with advanced versions of our legacy solutions that we already offer. For example, our keyless locking system, our wiring harness, low voltage to high voltage analogue clusters and TFT instrument clusters. Now, all this will result in an increase in the content of our legacy product from ₹4000 to ₹8000 per two-wheeler.

Secondly, with the help of state of the art R&D facility in Pune- the spark Minda Tech Centre - we have mapped various new products needed in the EV space. Here we have a long-term and mid-term approach. For the immediate mid-term, I have already developed product ranges needed for the market, whose value is about ₹8000-the AC to DC converters, the battery charger partnership that we’re doing, some of the other development products that we are looking at.

In the long term, we are looking at JVs and partnerships. Nearly all our product line is immune to electrification and will have to go through enhancement when EV comes. We want to become a one-stop solution for all EV components.

In the last 9 to 12 months, we have won businesses with a lifetime value of over ₹800 core from incumbents as well as new startups. For instance, TVS, Ola Electric, Revolt, etc for our legacy products as well as our new products.

I will caution, however, that while things look good for now, all of this depends on how the industry will uptake electrification. Right now, EV is just 1 per cent of our overall business. So, it all depends on the uptake that happens, but we are ready with the product, technology, capacity, etc.

COMMENT NOW