Ashok Leyland: Promoter Pledge Increase and EV Business Restructuring Impact Stock
Ashok Leyland's promoters increased pledged stake to 25.59%. The company plans to cease EV manufacturing in the UK due to slow market adoption, focusing instead on the Indian EV market. Switch Mobility India aims for EBITDA breakeven in FY25 and expects to treble volumes in FY26. The company denied rumors of acquiring a stake in SML Isuzu.

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Ashok Leyland , a major player in the Indian commercial vehicle sector, has recently been in the spotlight due to significant developments affecting its stock and operations.
Promoter Pledge Increase
Ashok Leyland's promoters have increased their pledged stake from 15.38% to 25.59%, resulting in 49.20% of the total promoter holding now being pledged. This move comes in the wake of a sharp decline in IndusInd Bank shares, both companies being promoted by the Hinduja Family. The stock initially saw a decline but later pared some of its losses.
EV Business Restructuring
In a separate development, Ashok Leyland's electric vehicle (EV) business, Switch Mobility UK (Switch UK), is considering ceasing its manufacturing operations in the United Kingdom. This decision comes amidst ongoing economic uncertainties in the UK and Europe, coupled with a slower-than-expected transition to EVs in public transport.
Key Points from the Company's Announcement:
- Switch UK will complete all existing orders and continue to provide aftermarket support for its current vehicle fleet.
- The company plans to serve the UK and European markets from Ashok Leyland's manufacturing sites in India and UAE when the market recovers.
- Switch Mobility Automotive Ltd, India (Switch India) is set to focus on the high-growth Indian EV market.
Management Commentary
Mr. Shenu Agarwal, MD & CEO of Ashok Leyland, stated, "While Ashok Leyland remained committed to the UK market over the last 15 years, adoption of zero emission passenger vehicles has been tepid. This seems to be the right time to cut down losses in the UK market."
He further added, "Switch India is likely to achieve EBITDA breakeven in FY25, and is hoping to treble volumes in FY26, on back of 1800+ e-Bus orders in hand. In e-LCVs, within the 2-3.5T segment, the Company's market share is at 80% plus, with prospects of 50-80% volume growth in FY26."
Financial Implications
Mr. K M Balaji, Chief Financial Officer of Ashok Leyland, commented on the financial aspects:
- The potential cessation of UK manufacturing is expected to mitigate losses from UK operations.
- Cash flow requirements for Switch UK will be met through a GBP 45.00 million equity infusion already approved by Ashok Leyland's Board in February.
- Switch India is performing better than expected and may not require significant equity infusion in the near future.
Market Rumors Addressed
In response to recent media reports suggesting that Ashok Leyland might be close to acquiring the promoter's stake in SML Isuzu, the company has categorically denied these claims as factually incorrect. Ashok Leyland has urged stakeholders to disregard any misleading information circulated in the media.
These developments highlight Ashok Leyland's strategic moves to optimize its operations and focus on high-growth markets, particularly in the EV sector in India, while addressing challenges in its international operations.
Historical Stock Returns for Ashok Leyland
1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
---|---|---|---|---|---|
+2.14% | +5.03% | +10.34% | -0.26% | +29.04% | +347.81% |