Commercial vehicle maker, Ashok Leyland is confident of concluding a deal with investors in the coming weeks to raise funds for its electric vehicle subsidiaries Switch Mobility and OHM Global Mobility, a top executive of the company said.

Ashok Leyland, a flagship company of the Hinduja Group, has been searching a financial partner for Switch Mobility since the past several months. .

At present, Switch has intra-city electric buses under its fold and plans to roll out electric versions of the light commercial vehicle Dost and Bada Dost by the final quarter of this financial year.

Dheeraj Hinduja, Chairman, Ashok Leyland, said, “We have not closed this as quickly as we can. We want to make sure we get the right valuation and get the right partner. I believe we are there now, we are working towards closure in the coming weeks.”

Step-down subsidiary

Switch Mobility Automotive is a step-down subsidiary of Ashok Leyland incorporated in December, 2020 with an objective of manufacturing and dealing in electric vehicles (EV). With effect from October, 2021 Ashok Leyland transferred the EV business to Switch on a slump sale basis for a consideration of ₹240 crore.

Ashok Leyland holds 91.63 per cent equity stake in the UK-based company Optare Plc. Optare Plc has around 98.90 per cent stake in Switch Mobility, UK. Switch Mobility, UK in turn holds 100 per cent stake in Switch Automotive Mobility (India), with focus on manufacture and sale of electric commercial vehicles globally.

“Switch India is operational with its own dedicated team. We are awaiting statutory approval for transferring the EMASS (electric vehicle mobility as a service) business to OHM Global Mobility India. We are in discussion with investors to raise capital both at Switch Mobility UK and OHM Global Mobility India. The investors do realise the real value Switch brings in. We are very close in finalising (the deal) with the investors,” Hinduja added.

In line with peers

Ashok Leyland is following the path taken by its peers Tata Motors and Mahindra & Mahindra (M&M) for expanding its EV businesses. Both the Mumbai-based companies have announced equity stake sale in their newly created EV subsidiaries at a valuation of $9.1 billion each.

While Tata Motors has been going after electric bus supply contracts aggressively compared to its rivals, Switch Mobility has adopted a rather softer approach in chasing contracts. It bagged a few e-bus supply contracts from a few public transport undertakings.

Switch currently has roughly 600 bus orders in India from Bengaluru Metropolitan Transport Corporation (BMTC), Brihanmumbai Electric Supply and Transport (BEST) and a few private orders. Most of these are for e-mobility as a service, where Ashok Leyland will own and operate the buses on behalf of the customers for a fixed contract period.