EV maker Olectra Greentech faces ₹2.58 cr penalty from TGIIC for delay in project completion

The Telangana Industrial Infrastructure Corporation (TGIIC) has imposed more than ₹2.57 crore penalty on electric vehicle maker Olectra Greentech for delay in completion of the greenfield EV manufacturing facility in Hyderabad.

A demand notice from TGIIC imposing a penalty of ₹2,57,87,484, including GST, for the period from November 12, 2023 to November 11, 2025, has been received. The penalty is due to the delay in the full completion of the ongoing construction of the facility at the Industrial Park, Seetharampur, Hyderabad, Olectra Greentech said in a filing on Thursday.

TGIIC has directed the company to remit the penalty amount within 7 days of receipt of the order. Olectra Greentech said as per the sale agreement dated November 11, 2021 with TGIIC, the company acquired 150 acres of land at the Industrial Park. In response to the company’s request for an extension of the timelines, for setting up of the facility and for issuance of the required no objection certificate (NOC) to obtain credit facilities against the property, TGIIC invoked the penalty clause set out in the sale agreement and levied the penalty for the delay in completing the construction.

The company, however, has already partially commenced commercial operations at the new facility within the timelines stipulated in the sale agreement, the Megha Group company said. Apart from the penalty amount, there is no material impact neither financially nor operationally for the company, it said.

Olectra is focussed on the electric bus and the e-truck segments. It has a technology tie-up with Chinese EV major BYD.

Senior executives had told investors last month that the greenfield plant has partially started operating and achieved a capacity of 2,500 vehicles per shift. The plant can reach a capacity of 5,000 if operated in two shifts, they said, adding that the market last year was 4,200 vehicles and expected to be about 6,000 vehicles. The company has the highest market share and positioned well, with the capacity available, to meet the market demand. The second phase of expansion will happen as the market grows.