Hyundai Motors and Kia Motors Invest $300 Million in Ola and Ola Electric
- BY Jaspreet Kaur
Feature Writer, BusinessEx
- Nov 01,2019
- 10 Mins Read
The awaited investment by the Korean automobile firms, Hyundai Motor and Kia Motors to push the EV segment in India has received a nod. After a denial earlier this year, the Competition Commission of India (CCI) has now approved the proposed foreign investment in Ola as well as Ola Electric. As per the media reports, the Korean automakers will concertedly make $250 million investment in Ola and $50 million in Ola Electric.
With this investment, Hyundai Motors and Kia Motors will be acquiring a minority stake in the parent company, ANI Technologies.
The CCI proclaimed its approval for the foreign investment in ANI Technologies, which administers Ola Electric and Ola, through its tweet on the social media network, Twitter, reported The Economic Times.
"The commission approved the proposed combination, subject to carrying out of modifications proposed by HMC and KMC, under regulation 19(2) of the CCI (procedure in regard to the transaction of business relating to combinations) Regulations, 2011," Mint reported citing the CCI official statement.
Why ANI Technologies Earlier Received a Denial from CCI?
In March this year, Hyundai-Kia investment in ANI Technologies was being questioned by CCI. The statutory body asked ANI Technologies to define ‘competitive landscape’ for EV segment and secondly, their employment in ride-hailing services.
According to several media reports, the statutory body was worried that the entrance of giant automakers--Hyundai and Kia Motors in the ride-hailing space might give rise to unfair competition. To make sure that the deal did not hamper other businesses in the ride-hailing space, CCI asked the parent company of Ola to define the electronic mobility market in cab-hailing services.
However, the Ola-operated firm could not submit its report in the assigned time and thus, its application became invalid. In September this year, ANI Technologies filed its application along with the report, which mirrors a clear picture of the EV market.
The competitive landscape report encompasses market for manufacture as well as the sale of passenger automobiles in India, the market for radio taxi services, the market for operational leasing services and the market for charging infrastructure services for the electronic vehicles, reported Inc42.
Other Plans to Expand the Business
Besides Hyundai-Kia’s offerings, ANI Technologies is reportedly going to soar its valuation to $8 billion as it plans to carry out an investment round. In the funding round, tech giant, Microsoft can be witnessed infusing around $170-$200 million in the ride-hailing application, reported The Economic Times.
According to the cited report, small family offices, as well as Korean investment funds, can also partake in the funding round.
Since 2017, both companies, Microsoft and Ola are concertedly working to create a connected vehicle platform, Ola Pay.
In September this year, Ola had raised INR 35.9 crore from the investment fund, ARK Ola Pre-IPO Private Investment Trust.
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