Ashok Leyland shares gain after raising stake in British subsidiary for Rs 662 crore

Shares of Ashok Leyland advanced 1 percent to Rs 176 in early trade on December 6 after the company announced raising its stake in Optare Plc UK for about Rs 662 crore.

The commercial vehicle maker will now have close to 92.20 percent of the company from the previous 91.63 percent, Ashok Leyland said in an exchange filing on December 5.

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Optare is involved in the business of manufacturing and sale of commercial vehicles. As of March 2023, the company reported a consolidated revenue of Rs 230 crore. Optare is the holding company of Switch Mobility Limited, and Switch Mobility Automotive Limited, both subsidiaries of Ashok Leyland.

The company suggests that the rationale behind the additional stake purchase is capital expenditure, research and development and meeting
operational requirements of Optare and Switch Mobility – both in the UK and in India.

In November, the Hinduja Group flagship company witnessed a 3 percent decline in sales both in the domestic and overseas markets. Sales of medium and heavy commercial vehicles slipped by 10 percent to 8,500 units in November 2023, as against 9,474 units sold a year ago. However, the total number of light commercial vehicles sold grew by 9 percent to 5,553.

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