Pune-based electric motorcycle startup Tork Motors is exploring a potential stake sale to stay afloat amid financial difficulties, following the fallout of a $7 million investment deal in February, according to sources. The Economic Times was the first to report the development.
Tork Motors, backed by prominent investors like Ratan Tata and Ola’s Bhavish Aggarwal, has reportedly reached out to several two-wheeler giants, including Kinetic Green, HeroMotoCorp, and TVS Motor Company, with stake sale proposals. The company has yet to respond to requests for comments from YourStory.
In February, Tork Motors had raised $6 million from Maxis Capital, according to multiple reports. However, the company has faced mounting challenges, particularly after its dealers lodged a collective police complaint. An ETAuto report last month highlighted that the company had been unable to dispatch vehicles to its dealers since December 2023, exacerbating its financial troubles.
Additionally, Bharat Forge, which holds a 64.29% equity stake in Tork Motors through its subsidiary Kalyani Powertrain Ltd., has written off its entire investment. Bharat Forge is now working with Tork Motors on an “orderly wind-up” of the company.
In its Q1 FY25 earnings conference call, Bharat Forge’s Vice Chairman and Joint Managing Director, Amit Kalyani, explained the decision to write off the investment, citing a funding freeze and the impact of recent changes to the Indian government’s Faster Adoption and Manufacturing of Electric Vehicles (FAME) subsidy norms.
“On the impairment of investment in Tork, it’s basically a victim of the funding freeze and the impact of the FAME (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India) subsidy norms. Twice, we were very close to getting investors, twice Tork was very close to getting investors in its company, but that did not materialise. As you are aware, we are investors in Tork, and we have invested slightly more than Rs 150 crores overall, and the Tork management has been working on finding alternative funding options, as it is not in our business practice to fund business losses in continuity, in perpetuity,” Kalyani said.
The recent changes in the FAME subsidy scheme, which reduced the two-wheeler subsidy from Rs 15,000 per kWh to Rs 10,000 per kWh of battery capacity, have reportedly had a significant impact on demand for electric vehicles, compounding the financial challenges faced by manufacturers like Tork Motors.