Auto Sector Draws Over ₹3,500 Crore in Fresh Investments as EV Expansion, Acquisitions Gather Pace: Equirus

India's automobile sector attracted fresh investments, acquisitions and capacity expansion over recent months, while retail demand and electric vehicle (EV) adoption continued to support the industry's growth, according to an Equirus Capital report.

The report said companies across the automotive value chain raised more than ₹3,500 crore through equity funding, strategic investments and expansion plans, alongside mergers and acquisitions aimed at strengthening manufacturing capacity and diversifying product portfolios.

Among the key transactions, Craftsman Automation raised about ₹2,000 crore through a Qualified Institutional Placement (QIP), with the proceeds to be used mainly for debt reduction and capacity expansion. Ola Electric Mobility raised nearly ₹780 crore through a QIP to support manufacturing expansion and strengthen its balance sheet.

EV manufacturer Simple Energy secured around ₹250 crore in a Series B funding round to increase production, while JBM Ecolife Mobility raised about ₹750 crore to expand its operational electric bus fleet from around 3,400 buses to nearly 5,000 buses over the next 12 months.

In the components segment, Rane (Madras) agreed to acquire Hindustan Composites' friction business for about ₹370 crore, while Sona BLW Precision Forgings approved around ₹63 crore in capital expenditure to enter robotics components manufacturing.

According to the report, these investments reflect continued capital deployment across vehicle manufacturers, EV companies and auto component suppliers.

On the demand side, automobile retail sales rose 9.55% year-on-year to 25.31 lakh units in May 2026, marking the highest-ever May registrations for overall vehicles, passenger vehicles, three-wheelers and tractors. Retail volumes declined 6.75% from April, which the report attributed to seasonal factors and the delayed southwest monsoon rather than weaker demand.

Passenger vehicle retail sales increased 23.25% year-on-year to 4.03 lakh units. Rural markets recorded 30.35% growth compared with 18.80% in urban markets. Commercial vehicle sales also grew faster in rural areas, rising 8.10% against 2.62% in urban markets. Two-wheeler retail sales increased 7.54% to 18.45 lakh units.

The report also noted continued growth in electric mobility. EV penetration in the two-wheeler segment increased to 9.25% from 6.11% a year earlier. In passenger vehicles, CNG accounted for 23.34% of retail sales, while EVs contributed 6.63%, taking the combined share of alternative powertrains to more than 38%.

Commercial vehicle EV penetration reached 2.86%, the highest recorded so far, according to the report.

The report also cited policy support for the sector, including the notification of the Delhi Electric Vehicles Policy 2026, which proposes investments of about ₹15,000 crore to support EV adoption through incentives and phased electrification targets.

Equirus said mergers and acquisitions, private equity investments and capital market activity remained active across OEMs, EV companies and auto component manufacturers, with ancillary companies accounting for a significant share of deal activity. It added that continued investments, expanding EV infrastructure and domestic demand are expected to support the sector's medium- to long-term growth.