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

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

The investment, which was aimed to fund Switch’s expansion plans and help enter and source from key markets was expected to conclude in the initial half of this year. Edited excerpts:

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

Our engagement with potential investors continues. Where we don’t want to rush is to ensure that we have a partner who not only sees the business plan and the long term of this company as we have planned out, but also gets us the right pricing and the right valuation for the company.

In the interim, the company is supported through Ashok Leyland and the delay in fundraise is not affecting any of its immediate product plans, which is the most crucial issue. So yes, we are delayed but it is not affecting or hurting the long-term business plan that the company has.

Are you going to wait till the company achieves a few more milestones to get a desirable valuation? What kind of investor are you seeking for Switch?

It is not purely an issue about the valuation itself. It is a combination of ensuring valuation but also longer term partner, as opposed to someone who’s looking for two or three-year investment and exit.

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

The commercial vehicle cycle is on an upswing across segments. You’ve seen significant market share gain in the medium and heavy commercial vehicle segment. Do you expect a new peak for the industry?

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

So, overall, there seems to be a lot of bullishness and this is supported by on-ground activity like construction, mining and government infra programmes.

On a wider basis, we do consider that other countries are moving into recession. There are difficulties, but a lot of the push that the government has given is keeping the growth momentum going, and if we end up with the GDP around 5-6%, that’ll definitely have a very positive impact for the industry. So, the next few quarters definitely will 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 readying your product pipeline to integrate new vehicle technologies in your portfolio?

We are making sure that depending on government legislation and customer preferences, we need to be ready with all different alternative fuels. Starting from electric under Switch Mobility, under Ashok Leyland, there will be hydrogen fuel cells, LNG and our complete range of products will be available in CNG as well. In our portfolio in the next 18 to 24 months, we are hoping to ensure that all the different fuel types are available depending on what the economics of those fuels themselves are and what the customer preferences are.

In the product portfolio, beyond the fuel type itself, today, we have products right from a 2-ton product up to 55 ton product, and even with buses, we have the full range of products. There could be some gaps in the product portfolio that we will fill up, but otherwise, I think we have a very comprehensive product range today, that’s performing very well as well.