Eicher Motors Limited has approved an investment of up to Rs 750 crore to acquire a 50% equity stake in Volvo Financial Services (India) Private Limited. The transaction forms a 50:50 joint venture with the Volvo Group and is subject to approval from the Reserve Bank of India (RBI). The joint venture entity is intended to function as a captive financing arm for customers of AB Volvo, its group entities, VE Commercial Vehicles Ltd, and Eicher Motors in India.

The target entity, Volvo Financial Services (India) Private Limited, was incorporated on January 13, 2015. It operates as a Middle Layer Non-Deposit taking Non-Banking Financial Company (NBFC) registered with the RBI. As of March 31, 2026, the entity reported a paid-up equity share capital of Rs 514.4 crore. For the fiscal year 2025-26, the company recorded a turnover of Rs 174.98 crore and assets under management (AUM) of Rs 1825 crore.

Financial Performance

The NBFC has demonstrated steady growth in its operations over the past four years. The following table details the turnover figures for the recent financial years:

Joint Venture Structure

The Joint Venture Agreement (JVA) was signed on May 21, 2026, between Eicher Motors, Volvo Business Services International AB, Volvo Financial Services Aktiebolag, and the proposed JV entity. Post-closing, Eicher Motors will subscribe to fresh equity shares against cash consideration to secure its 50% ownership. The exact investment amount and issue price per share will be determined at the time of closing.

The governance structure of the JV will feature a shared control mechanism with equal representation from both partners on the board of directors and board committees. Volvo retains the right to nominate the Chief Executive Officer, Chief Financial Officer, and Chief Risk Officer, while Eicher Motors will nominate the Managing Director and the Deputy Chief Financial Officer. The Board Chairman role will rotate between the two parties every three years.

Strategic Rationale

Eicher Motors and AB Volvo have maintained a partnership through VE Commercial Vehicles Limited for approximately 18 years. By entering the financial services sector, Eicher Motors aims to integrate financing solutions into its commercial vehicle value chain. The transaction is classified as a related party transaction because the target entity is a related party of VE Commercial Vehicles Ltd, a subsidiary of Eicher Motors. The deal was conducted on an arm's length basis.

Eicher Motors Limited's Nomination and Remuneration Committee has approved the grant of stock options under the ESOP 2006 and RSU Plan 2019. The decision was made on May 21, 2026, in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Grant Details

The committee approved the grant of 1,37,365 restricted stock units under the Restricted Stock Units Plan, 2019 to the employees of the company and its subsidiaries. These units shall become exercisable upon completion of a period of 3 years from the grant date. Upon exercise, each stock unit shall convert into one equity share of face value of Re. 1 each.

Additionally, the committee approved the grant of 27,000 employee stock options under the Employees Stock Option Plan, 2006 to the employees of the company. These stock options shall become exercisable upon completion of a period of 4 years from the grant date. Upon exercise, each stock option shall convert into one equity share of face value of Re. 1 each.

Plan Overview

The plans are designed to provide long-term incentives to employees, aligning their interests with those of the shareholders.

Regulatory Compliance

The approval process adhered to Regulation 30, which mandates timely disclosure of material events. The company has ensured that all necessary procedural requirements were met during the grant process.