Indian Oil Corporation Limited Partners with Sun Mobility for Battery-Swapping Venture in India

On June 5, 2024, Indian Oil Corporation Limited officially signed a Joint Venture Agreement with Sun Mobility Pte Ltd Singapore. This agreement marks the formation of a new company, with both parties having an equal share, to run the battery-swapping business in India.

The Joint Venture Agreement has been signed between Indian Oil Corporation Ltd. (IndianQil) and Sun Mobility Pte. Ltd, Singapore (SMS). The agreement pertains to establishing a joint venture focused on the Battery Swapping Business within the domestic market. Under this agreement, Indian Qil and SMS will have an equal share in the joint venture, with a 50:50 ratio.

The joint venture’s business operations will involve two main activities. First, it will deploy and manage Battery-as-a-Service (BAAS) solutions for two-wheeler, three-wheeler, and four-wheeler vehicles weighing less than 2 tonnes, known as Small-Format Electric Vehicles (SFEV). Second, it will retrofit vehicles and convert them into SFEVs using docks and batteries, enabling their functionality as electric vehicles for the SFEV-BAAS network, including swap points at IndianOil Retail Outlets.

The initial paid-up share capital of the joint venture will amount to ₹2 lakh, consisting of 20,000 equity shares with a face value of ₹10 each. Both JV partners will contribute equally to this share capital.

This agreement does not constitute a related party transaction. IndianQil and SMS are significant entities, with IndianQil reporting a consolidated revenue of ₹8,81,235 crore and SMS reporting a revenue of USD 11.524 million for the financial year 2023-24. The rationale behind this joint venture lies in the substantial growth observed in the Indian market for electric two-wheelers and three-wheelers. Battery-swapping technology is anticipated to play a crucial role in the energy dispensing infrastructure for electric vehicles.

About Indian Oil Corporation Ltd

Indian Oil Corporation Ltd, a Maharatna Company under the Government of India (GOI), operates across the entire hydrocarbon value chain. Its business interests include refining, pipeline transportation, and marketing of petroleum products, along with R&D, exploration and production, and the marketing of natural gas and petrochemicals. Indian Oil is leading in India’s oil refining and petroleum marketing sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.