Chennai, Jan 24 (IANS): Diversified products company Tube Investments of India Ltd, a part of the Rs 417 billion Murugappa group, has agreed to acquire electric tractor maker Cellestial E-Mobility Private Ltd for Rs 161 crore.

According to Tube Investments, in an all-cash transaction, the company will pay Rs 161 crore for the acquisition of 70 per cent stake in Cellestial with each Rs 10 share of the latter valued at Rs 11,356.

Cellestial is a startup entity engaged in design and manufacture of electric tractors, aviation ground support electric equipment and other electric machinery.

The company has already designed and developed two tractor prototypes for production.

With this, Tube Investments, which had earlier said it would venture in the three-wheeler electric vehicle segment, has now added electric tractors to its portfolio.

The company is now proposing to form a wholly-owned subsidiary to consolidate the electric three-wheeler venture and other electric vehicle related ventures.

The company will infuse initial capital to the extent of Rs 350 crore into the new subsidiary for clean mobility through a combination of equity, preference and debt instruments.

"The formation of a separate subsidiary and acquisition of a controlling stake in Cellestial will enable the company to bring required focus to the emerging growth opportunities in electric vehicles. These new EV products along with the existing product portfolio of bicycles and e-bicycles will further strengthen the company's efforts towards climate change and sustainability," said M.A.M. Arunachalam, Chairman, Tube Investments, popularly known as Arun Murugappan.