Ashok Leyland rises 4% on inking ₹5,000-cr pact with CALB for batteries

Ashok Leyland shares rose 3.75 per cent on Tuesday and registered an intra-day high at ₹132.8 per share on BSE after the company announced to invest in the development and manufacturing of batteries

Ashok Leyland shares rose 3.75 per cent on Tuesday and registered an intra-day high at ₹132.8 per share on BSE. At 11:24 AM, Ashok Leyland's share price was trading 3.4 per cent higher at ₹132.35 per share. In comparison, the BSE Sensex was up 0.37 per cent at 80,664.55.

 

The market capitalisation of the company stood at ₹77,700.51 crore. The 52-week high of the stock was at ₹134.45 per share, and the 52-week low was at ₹92.2.

 

In one year, Ashok Leyland shares rose 2 per cent, as compared to Sensex’s decline of 2.6 per cent.

Why were Ashok Leyland shares in demand? 

The buying on the counter came after the company announced to invest in the development and manufacturing of batteries, for both automotive and non-automotive applications, including energy storage systems.

 

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The company has entered into a long-term partnership with CALB (HK) Co. Ltd., one of the battery technology companies. The Indian automaker will invest over ₹5000 crore over the next seven to ten years in the development and manufacturing of next-generation batteries.

 

The move will not only provide for Ashok Leyland and subsidiary Switch’s own electric vehicle portfolio but will also cater to non-captive demand in the entire automotive sector as well as in energy storage sector.

 

“Ashok Leyland is committed to shaping the future of sustainable mobility in India in full alignment with the government's vision. Our strategic partnership with CALB is a significant step towards creating a localised battery supply chain in India to accelerate adoption of electric vehicles in India and reduce our dependence on fossil fuels,” said Dheeraj Hinduja, chairman, Ashok Leyland.

 

The company said it will also venture into energy storage systems at a later stage.  “In the initial phase, the new battery business shall focus on the automotive sector, and then move to non-automotive areas as well, including energy storage systems. A Global Centre of Excellence will be created to serve as a hub for research and development, fostering innovation in battery materials, recycling, battery management systems, and advanced manufacturing processes,” said Shenu Agarwal, managing director and chief executive officer, Ashok Leyland. 

 

Ashok Leyland aims to cater to electric vehicle requirements, both captive and non-captive, through this agreement. 

 

Ashok Leyland is the second largest manufacturer of commercial vehicles in India, the fourth largest manufacturer of buses in the world, and the thirteenth largest manufacturer of trucks. 

 

On the other hand, CALB is a global leader in new energy technology. It develops a comprehensive energy operation system with a continuous focus on leading technological innovation and the strength of large-scale intelligent manufacturing.