‘Switch needs a long-term partner with a global outlook’

Hinduja Group is looking to raise funds for flagship Switch Mobility, its zero-emission electric commercial vehicle subsidiary, as well as Ohm Mobility, its electric-mobility-as-a-service subsidiary. The company is looking for a “long-term investor” who can support its global vision at a reasonable valuation, said Dheeraj Hinduja, executive chairman, Ashok Leyland said in an interview.

Investment, which was intended to finance Switch’s expansion plans and help it penetrate and source from key markets, was expected to conclude in the early half of this year. Edited excerpts:

Why is your fundraising plan for Switch Mobility getting delayed? Do plans take a back seat for now, or do your engagements with potential investors continue?

We are continuing to engage with potential investors. Where we don’t want to rush is to make sure that we have a partner that not only looks at the business plan and the long term of this company as we’ve planned, but also gives us the right pricing and the right opportunities for the company. You also get an evaluation. ,

In the interim, the company is backed through Ashok Leyland and the delay in fundraising is not affecting any of its immediate product plans, which is the most important issue. So yes, we are getting delayed but it is not affecting or harming the long term business plan of the company.

Are you going to wait till the company achieves a few more milestones to get the desired valuation? What kind of investors are you looking for for Switch?

This is not purely an issue about valuation itself. It’s a combination of ensuring valuation, but also a long-term partner, unlike someone looking to invest for two or three years and exit.

We’ve had several advanced discussions with investors and interest in Switch remains. It is probably one of the few EV companies that is playing in the Indian as well as European markets. The investors we are looking for are people who want to see this kind of company grow globally. There are some investors who like only India story and some investors are only keen on Europe. Our favorite investment group would rather see a global game for the Switch as opposed to a regional one.

Commercial vehicle cycles are growing across all segments. You have achieved significant market share in the medium and heavy commercial vehicle segment. Do you anticipate a new peak for the industry?

For the last one year, we are seeing a month-on-month increase, and indications are that M&HCVs should see a growth of 22- 24%. Light commercial vehicles should also see growth in the range of 20-22%.

So, overall, there is a lot of upside and it is supported by on-the-ground activities like construction, mining and government infrastructure programmes.

On a broad basis, we believe other countries are heading into recession. There are difficulties, but what the government has given a lot is maintaining the pace of growth, and if we end up with around 5-6% GDP, that would definitely have a very positive impact for the industry. So, the next few quarters will definitely see growth, but I would say, barring any unforeseen events like Covid-19, the next few years are looking very encouraging for the industry.

How are you building your product pipeline to integrate new vehicle technologies into your portfolio?

We are making sure that we are ready with all the different alternative fuels that are required, based on government laws and customer preferences. Starting from Electric under Switch Mobility, Hydrogen Fuel Cells under Ashok Leyland, LNG and our entire range of products will also be available in CNG. In our portfolio over the next 18 to 24 months, we’re hoping to make sure that all different types of fuels are available depending on what the economics of those fuels are and what the customer’s preferences are.

In the product portfolio, beyond fuel type, today, we have products ranging from 2-tonne products to 55-tonne products, and with buses as well, we have a complete range of products. There may be some gaps in the product portfolio that we’ll fill, but otherwise, I think we have a very broad product line today, which is performing very well.