Electric Vehicle and Green Steel
Confusing issues
Lesson from Gensol
On the 24th of June 2024 – we had Gensol make a pitch to the IIT Alumni Social Fund for a Rs 100 crore equity stake. There were twelve people in the screening committee. I sat on one corner taking minutes. The meetings are video recorded but writing minutes is an old habit which works for me. We have a Gen AI platform which is older than Deepseek or ChatGPT – and it can write an entire book by just hearing you day and night. But I am a victim of habit.
Puneet Goyal to be fair is an affable and pleasant young man. He is not an IITian. His partner Jaggi is IIT Roorkee. A week earlier I had met Ashneel Grover at the same location. He is IIT Delhi. Ashneel is arrogant and condescending. The difference was striking.
We were ok with the documents and the presentation. We had a simple term. Three way separation of shareholders, board and management. The founders could only wear one of the three hats and no more. We wanted to appoint a concurrent auditor who would run the bank account and we wanted the company to go public in six months. The ibanker was to complete listing due diligence before our cheque went in the mail.
We broadly knew where the company was going by then. Pretty definitively. But we’re hopeful it could be salvaged.
They never did agree to the terms and nothing happened after that.
As is customary, we track a potential investee for a couple of years after we meet – irrespective of whether we invest or not. I reached out to Puneet. No response. I tried again every alternate month as it kept showing up in my pending items list. By then we had a complete idea of where the company was going.
We soon had another request. Their sister company Matrix was trading in LNG. They had won a tender to get subsidy for a green steel plant. The tech advisor was a metallurgy professor from IIT Kharagpur who was on deputation as the Director of IIT Bhubaneshwar. Their idea was to make green steel in Chattisgarh and sell it to Balaji Alloys. Our metallurgists would have nothing of it.
What was common between Green Steel and electric taxis. Both were unviable businesses chasing govt subsidies to access capital. Pretty similar to TAta Motors and their electric buses.
That day we got it. Any subsidy seeker doesn’t make a good investee. The business is set up for considerations other than business.
We also understood that by going green an unviable business becomes even more unviable. In fact it ceases to be a business. It is now a social cause.
And that is how Go Mobility Platform was born. We no longer look upon green mobility as a business. We look upon it as a social challenge. That changes the lens.
We have Gensol & Matrix and Tata & JBM to thank for this realisation.
Our final conclusion is that public transportation has to be FREE to the passenger. Not everything has to be a business. Not everything can be a business.