Ashok Leyland, the Chennai-based commercial vehicle manufacturer, has announced plans to invest Rs 500 crore in Optare PLC, the holding company of its electric mobility subsidiary, Switch Mobility.
The investment is set to be made in the fourth quarter of FY25. The company will also inject Rs 200 crore into Hinduja Finance to support its capital adequacy requirements, the management disclosed on Wednesday.
During a post-earnings conference call, Dheeraj Hinduja, Executive Chairman of Ashok Leyland, outlined the rationale behind these capital allocations. The additional funding is expected to support Switch Mobility's ongoing capital expenditure and expansion plans.
The move comes nearly a year after Ashok Leyland sanctioned an equity infusion of Rs 1,200 crore into Switch Mobility. At the time, the company had opted to defer raising external capital, citing that its internal funding would suffice to meet development needs for the foreseeable future.
Switch Mobility, Ashok Leyland's electric vehicle arm, has secured an order book of over 1,800 electric buses at the end of Q3 FY25, including an export order of 100 buses from Mauritius. The company's electric light commercial vehicles (e-LCVs) have been showing steady growth, with monthly sales exceeding 100 units.
Regarding broader capital expenditure, Ashok Leyland's leadership indicated that the capex for the next fiscal is still under review. However, preliminary estimates suggest that the company's total capital expenditure in FY25 will range between Rs 800 crore and Rs 1,000 crore