Ashok Leyland increases stake in Optare Plc to 92.6% to boosting EV initiatives
In a significant move within the automotive industry, Ashok Leyland, India’s leading commercial vehicle manufacturer, has announced an increased investment in Optare Plc, a U.K.-based subsidiary known for its manufacture and sale of commercial vehicles, particularly in the electric vehicle (EV) sector. Through a second tranche investment of GBP 50,679,500 (approximately Rs. 536.73 Crores), Ashok Leyland’s shareholding in Optare Plc has risen from 92.19% to 92.59%.
This strategic investment is aimed at bolstering capital expenditure, research and development (R&D), and operational requirements of Optare Plc., as well as Switch Mobility – both in the U.K. and India. Optare Plc plays a pivotal role in Ashok Leyland’s electric vehicle initiatives, serving as the holding company for Switch Mobility Limited, U.K., and Switch Mobility Automotive Limited.
The increased shareholding marks Ashok Leyland’s commitment to advancing its electric vehicle initiatives, reflecting confidence in Optare Plc’s potential to lead in the sustainable transport sector. The valuation for this investment was conducted based on a report from an Independent Valuer, underscoring the thorough due diligence undertaken by Ashok Leyland.
Ashok Leyland’s Strategic Investment in U.K.’s Optare Plc Marks a New Era in Commercial Electric Vehicles
Optare Plc’s revenue, as of March 31, 2023, stood at Rs. 229.72 Crores on a consolidated basis, indicating a focus on maintaining a robust financial performance amidst evolving market dynamics. This comes in the context of the company’s revenue trends over the past three fiscal years, showcasing the challenges and opportunities within the commercial vehicle and electric mobility sectors.
Hinduja Automotive Limited, a promoter, holds 6.90% of the share capital of Optare Plc, further highlighting the collaborative effort within the Hinduja Group to support and expand electric vehicle manufacturing and sales.
This investment not only strengthens Ashok Leyland’s position in the electric vehicle market but also signifies a crucial step towards realizing its vision for a sustainable and innovative transportation ecosystem. The focus on R&D and operational efficiency through this investment is expected to catalyze the development of advanced electric vehicles, contributing to the global shift towards cleaner and more sustainable modes of transportation.
As Ashok Leyland and Optare Plc continue to lead the charge in electric vehicle technology and commercial vehicle manufacturing, the automotive industry watches closely, anticipating further innovations that will drive the future of sustainable transport.