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Ashok Leyland to invest up to Rs 500 cr in FY15

Company also said would look at sale of non-core assets to reduce debt

T E Narasimhan  |  Chennai 

India’s second largest commercial vehicle major said on Monday that it would invest Rs 450-500 crore, by way of capex and investment during the current financial year. Gopal Mahadevan, Ashok Leyland’s chief financial officer said the company needed to manage Rs 6,000 crore of assets in seven locations across the world, for which maintenance capex would be needed. Besides, the company needed to make some investment in joint ventures. “I can’t have zero capex or investment. What will not happen is that there won’t be any chunky capex like Rs 1,000–1,500 crore on capacity expansion.

We will be investing Rs 450-500 crore.”

reduction programme

mobilised around Rs 660 crore by selling its including land and diluting its stakes in other last year. The company had set a target to bring down its equity 1:1.

According to Mahadevan already the to equity ration has already come down from 1.4:1 to 1.2:1.

Mahadevan said that in August last year company's debt was at the peak of around Rs 6,200 crore and it was brought down to around Rs 4,500 crore in the first quarter.

The company mobilised around Rs 660 crore by selling non crore assets, including land and its stake in IndusInd Bank and in

The company will look at only those assets, sales of which will not affect company's capacity of capability. "We are not in a hurry to sell non-core assets, we are in extremely stable financial position," said Mahadevan noting in 2013 the company said it will reduce debt by around Rs 1,000 crore, where it reduced around Rs 1,400 crore.

Debt Equity is a combination of reduction in debt and increase in equity, said Mahadevan, who noted the company raised around Rs 667 crore through QIP, which again was used to pay debt.

This was highest amount ever raised by through an equity issue. "The funds raised will help us reduce debt, as we continue to drive the performance of the company. The industry is also readying itself for revival in demand during the latter half of the year," said the company in the statement earlier. "Our target is to reduce debt equity ratio is 1:1 by end of the fiscal. We are progressing well and we will be able to achieve the target," said Mahadevan.

First Published: Sat, August 02 2014. 20:53 IST