Having put in place a plethora of subsidiaries and joint ventures, Ashok Leyland apparently found it was time to provide them financial support. In 2010-11, the company invested an unprecedented Rs 905 crore into its subsidiaries and joint ventures.

While its bringing equity funding into its joint ventures with Nissan and John Deere were only to be expected, there were a few surprise investments too.

For instance, the company invested Rs 130 crore into Avia of Czech Republic, which Ashok Leyland acquired in 2006 for close to Rs 160 crore.

Further, Ashok Leyland put in chunks of money into its two investment arms – Ashley Holdings Ltd and Ashley Investments Ltd – Rs 138 crore and Rs 140 crore, respectively.

Is Ashok Leyland readying a war chest for acquisitions? “I wouldn't say that,” says Mr P.K. Ranganathan, General Manager, Ashok Leyland. The company wanted to strengthen its investment arms, which in turn would raise debt resources too. Future investments of Ashok Leyland would be routed through these two companies.

As regards Avia, Mr Ranganathan said that the Czech company had turned the corner and was getting orders. Ashok Leyland has earlier said that Avia-made trucks would be assembled in its recently set up factory at Ras-al Khaimah, one of the United Arab Emirates. Avia also has a contract to supply chassis to an electric vehicle manufacturer in the US.

Albonair gets Rs 59 cr

Ashok Leyland's annual report for 2010-11 shows that the company invested Rs 59 crore in Albonair India Ltd, which is a subsidiary of Albonair, a German engineering company that Ashok Leyland acquired three years ago.

Albonair India Ltd is setting up a manufacturing unit near Gummidipoondi, where it will produce “clear air products”.

Another intriguing investment was that of Rs 20 crore into IndusInd Bank, in which the Hinduja group (to which Ashok Leyland belongs) is the principal shareholder. In fact, Ashok Leyland had to pare its holding in the bank a few years back, in deference to an RBI directive restricting industrial houses' ownership in banks.

Ashok Leyland also infused Rs 102 crore in its financing subsidiary, Hinduja Leyland Finance Ltd. Last year was the company's first full year of operations — it financed the purchase of 5,300 of Ashok Leyland vehicles (or about 7 per cent of sales) and made a total disbursement of Rs 1,200 crore.

Associate company Hinduja Foundries received Rs 10 crore from Ashok Leyland.

A tiny sub-text to the story is the Rs 7.5-crore invested in Ashley Bio Fuels Ltd, a subsidiary that is planning to produce jetropha-based fuels. A plant is coming up near Visakhapatnam, Andhra Pradesh.

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