Zelio E-Mobility, an electric two and three wheeler manufacturer listed on the BSE SME platform, has announced plans to raise up to USD 17.5 million, approximately Rs 168 crore, through a preferential issue of equity shares and convertible warrants. The company said the proposed fundraising will support manufacturing expansion, a wider distribution network, and the development of a new three wheeler facility in Patan, Haryana. The plan remains subject to shareholder approval, regulatory clearances, and in principle approval from the stock exchange.
Investor Participation and Allocation
The equity component involves issuing up to 9.73 lakh shares at Rs 853 each to four non promoter institutional and private investors, aggregating approximately Rs 83 crore. Motilal Oswal Financial Services is set to invest Rs 40.1 crore, while Calliope Capital Advisors LLP will commit Rs 31.4 crore. Param Value Investments will contribute Rs 8.5 crore and Hem Growth Opportunities Fund will provide nearly Rs 3 crore.
Convertible Warrants and Promoter Stake
Alongside the equity issuance, the board approved up to 9.96 lakh convertible warrants to promoters Niraj Arya, Deepak Arya, and Kunal Arya at the same price, raising another Rs 85 crore. Promoters will pay 25 percent of the warrant issue price upfront, with the balance 75 percent payable when the warrants are converted within 18 months of allotment. Following full conversion and equity allotment, the promoter group stake is expected to moderate from 72.8 percent to 70.9 percent, while public shareholding will rise from 27.2 percent to 29.1 percent.
Approvals and Use of Proceeds
The preferential issue will require approval from shareholders at an Extraordinary General Meeting scheduled for October 20, as well as in principle clearance from BSE and other applicable authorities. Shareholders will also be asked to approve related party transactions of up to Rs 50 crore each with five entities, to be conducted on an arm's length basis. Zelio has appointed SEBI registered Brickwork Ratings India to monitor the utilisation of the proceeds in line with regulatory requirements.
Manufacturing Footprint and Distribution Goals
Zelio currently operates manufacturing facilities in Haryana, Tamil Nadu, and Odisha, including a 263,450 square foot plant in Ladwa and smaller units in Coimbatore and Cuttack. The company is building a new three wheeler manufacturing facility in Patan, Haryana, and part of the proposed capital will support that project and broader expansion. Its dealer network currently covers more than 400 locations across 25 plus states, with a target of over 550 dealerships by fiscal year 2027.
Company Profile and Recent Milestones
Founded in 2021 by Neeraj Arya, the Hisar based electric vehicle maker specialises in low speed electric scooters and operates in more than 400 cities and towns. A recently inaugurated plant in Coimbatore is expected to help increase overall manufacturing capacity from 1.8 lakh units per annum to 2.4 lakh units per annum by the second quarter of fiscal 2027. The facility has an installed production and assembly capacity of 60,000 units per annum and will ramp up in line with market demand.
Financial Performance and Market Context
For fiscal year 2026, Zelio reported standalone revenue from operations of Rs 303.54 crore, reflecting a 76.28 percent year on year rise, and the company has remained profitable since inception. It made its BSE SME debut in October 2025, raising Rs 78.34 crore through an initial public offering at an issue price of Rs 136 per share. The proposed fundraise follows capital raising activity by listed electric vehicle peers, including Ola Electric and Ather Energy.
Zelio E-Mobility's proposed capital raise is designed to accelerate manufacturing scale and expand its market presence in the competitive electric two and three wheeler segment. Institutional participation alongside promoter warrants underscores confidence in the company's ability to execute its growth roadmap. Subject to approvals, the funding is expected to support a larger customer base and the continued development of its electric vehicle portfolio.