In an industry-first move, rating agency ICRA has assigned A- (Stable) to Greencell Marudhara Pvt Ltd, an electric bus-fleet operator for the Rajasthan State Road Transport Corporation (RSRTC), in Rajasthan.

ICRA’s rating in this sector is of significance with the Government of India promoting electric vehicles as a cleaner and sustainable form of transportation, with special focus on the commercial segment

The rating assigned for Greencell factors in its status as the successful concessionaire for procurement, operations and maintenance of 48, 12-metre-long, fully-built, air-conditioned electric buses on intercity routes for RSRTC (on gross cost contract basis under the FAME II Scheme), and its superior financial flexibility by virtue of being backed by Green Growth Equity Fund, said a statement.

Indian market may witness sale of 6,490 e-buses in next two years

“We are delighted to announce ICRA’s first rating in the emerging EV segment. Considering the significant cost-differential between conventional vehicles and EVs, the key driver for the adoption of EVs remain the incentives provided by the GOI,” said Shamsher Dewan, Vice-President, ICRA Ltd.

Joint ventures on the cards

The business model of companies in this space is expected to be characterised by high revenue visibility and minimal traffic risk, given the nature of the contracts, wherein entities will be paid a fixed rate (in Rs/km) for a minimum assured distance, subject to the assured bus availability, over a pre-defined contract period.

“For faster penetration of EVs in India, it is imperative that India develop a domestic EV manufacturing ecosystem as well. Currently, the domestic production scenario is in its infancy and is limited to assembly of imported components. However, given the localisation targets applicable to the FAME policy, this is expected to put in place the local manufacturing expertise. Going forward, we expect JVs between global EV OEMs and domestic partners,” said Dewan.

Public transportation and commercial segments have been identified as one of the important areas for electrification, with key focus being on the bus fleet in the country. Accordingly, FAME II aims to generate demand by way of supporting 7,000 electric buses (e-bus).

In addition to the demand incentives under FAME II, demand generation is also targeted through subsidised electricity tariffs, exemptions or reductions on road tax, registration tax in order to reduce the capital investment associated with EVs. As part of these programmes, SRTUs are being supported to gradually adopt e-buses into their fleet, with an order pipeline of more than 5,000 e-buses announced across the country.

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