This will empower the NBFC to on-lend customers in rural and non-metro regions in India, for purchasing electric two wheelers.
“By promoting the adoption of electric vehicles, we are working to reduce emissions, enhance air quality and provide affordable and accessible transport solutions nationwide,”said Rajiv Anand, Deputy Managing Director at Axis Bank. “We have proactively scaled up our partnerships and engagements with EV dealers, manufacturers, and other players and will continue to do so. This collaboration not only supports the development of green infrastructure in India but also aligns with our broader vision of fostering an inclusive future where sustainable practices benefit all segments of society.’’
GuarantCo has provided a 65 % on-demand credit guarantee to Axis Bank for this transaction, which is part of a broader $200 million 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 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 that have historically been underserved.
“Partnering with GuarantCo marks a significant step forward in accelerating the adoption of electric vehicles and advancing sustainable transport solutions in our country especially in the rural and semi-urban markets,” said Mathews Markose, Chief Executive Officer at Muthoot Capital. “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 INR 200 crores during FY25.”
The transaction will benefit Indian companies operating within the EV ecosystem and is 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 INR 2.5 billion loan to Vivriti Capital for supporting the company’s expansion strategy in the e-mobility ecosystem of India.
It had subsequently extended INR 1 billion loan to Everest Fleet for the purchase of electric cars to be deployed as low pollution emitting taxis in India.
“This is the third transaction that we have closed under the agreement which after the ones that we closed with Vivriti Capital and Everest Fleet now total INR 4.5 billion,” said Layth Al-Falaki, CEO of GuarantCo.
“This is also the first transaction under the framework which will cover the demand side of the EV business through the provision of credit so that customers can purchase electric vehicles. In addition, the transaction is expected to have a market transformation effect that we hope that it will help catalyse deployment of more electric vehicles in India. GuarantCo, through the Private Infrastructure Development Group, will continue to utilise the climate mitigation guarantee with Axis Bank to further the e-mobility ecosystem in India and to deliver against our climate action aims aligned with the PIDG 2030 strategy.”
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