The Indian government is promoting electric buses across the nation to reduce dependency on energy, encourage environmental benefits, and promote the “Make in India” initiative. To support this industry, the government is establishing infrastructure to ease the growth of the electric vehicle (EV) sector.
Additionally, the government is encouraging private bus fleet operators and institutional buyers. To further support this initiative, the government introduced the Faster Adoption & Manufacturing of Electric Vehicles (FAME) scheme in 2015.
The FAME scheme was launched in 2015 with an outlay of ₹5,172 crore. FAME II was announced in 2019 with budgetary support of ₹10,000 crore and continued until March 31, 2024. The government is set to approve a ₹10,000 crore FAME-III scheme for two years, likely to be announced in July’s budget speech.
The FAME-II scheme expired on March 31, 2024. Meanwhile, the government unveiled plans to subsidize two- and three-wheelers through the ₹500 crore Electric Mobility Promotion Scheme (EMPS) 2024.
Under the Faster Adoption & Manufacturing of Electric Vehicles (FAME) initiative, the Indian government is expected to support electric two-, three-, and four-wheelers, with a budgetary allocation of about ₹10,000 crore in the upcoming 2024-25 budget.
Additionally, the Central government is considering a mega electric bus mission plan with an outlay of ₹60,000 crore. The aim is to encourage the deployment of 800,000 buses on Indian roads by 2030, as reported by CNBC-TV18.
Here are major Electric bus manufacturing companies that might benefit from the FAME scheme and which are trading at a discount of 21%
Olectra Greentech Ltd
Olectra Greentech shares were trading at ₹1,764 per share on Thursday, down 0.61 percent from the previous close price. The company has a market capitalization of ₹14,463 crore.
Olectra Greentech Limited manufactures electric buses and composite polymer insulators. In addition, the firm is extending its product range in the e-mobility market to include three-wheeled electric vehicles and electric trucks.
Olectra Greentech Ltd shares have gained 45% in the last 12 months and 81% in the last six months. The company’s shares are trading at 21 percent discount from their 52-week high of ₹2,222 apiece to the current price.
Olectra Greentech receives technical support from BYD and has secured over 10,000 electric bus orders, making it the first e-bus OEM in India to achieve this milestone. Olectra Greentech and BYD have extended their collaboration agreement until December 31, 2030, highlighting the promising future of bus electrification in India.
Additionally, Olectra is setting up a new greenfield factory over a 150-acre site in Seetharampur near Hyderabad, Telangana, with an estimated investment of over ₹700 crore. In 2024, Olectra secured the “world’s largest e-bus order of 5,150 units” from the Maharashtra State Road Transport Corporation (MSRTC).
JBM Auto Ltd
On Thursday, JBM Auto’s shares were trading at Rs 2,032 per share, showing a marginal increase of 0.03 percent from the previous day’s closing price.The company, with a market value of Rs 24,079 crore.
The company has announced plans to invest Rs 800 crore through equity infusion in Gross Cost Contract (GCC) special purpose vehicles (SPVs) from fiscal 2024 to fiscal 2026, for tenders won under CESL-1 and CESL-2.
JBM Auto operates one of Asia’s largest integrated EV bus manufacturing facilities outside China, spanning 80 acres and boasting a highly automated state-of-the-art capacity to manufacture 10,000 electric buses.
Recently, the company launched India’s first completely designed and manufactured 100 percent electric luxury coach, the JBM GALAXY, at Auto Expo 2023.
According to company officials, JBM Auto Ltd plans to raise $100 million in debt to expand its electric bus leasing business, aiming to finance the expected growth in its order book of leased electric buses in India.
Currently, the company’s shares are trading 16 percent lower than its 52-week high of Rs 2,417 per share.
Ashok Leyland Ltd.
On Thursday, Ashok Leyland’s shares were trading at Rs 236.10 each, marking a 0.88 percent increase from the previous closing price. The company, with a market value of Rs 69,329 crore,
The company shares are trading at a 3 percent discount from their 52-week high of Rs 242.75.
Ashok Leyland, the world’s fourth-largest bus maker, is advancing into the electric vehicle (EV) sector. The company plans to manufacture batteries for EVs and is preparing to launch five new electric vehicles, including light commercial vehicles (LCVs) and buses. Its EV subsidiary, Switch Mobility, has already secured approximately 20 percent of India’s electric bus market.
Additionally, Ashok Leyland is establishing a new greenfield electric vehicle manufacturing facility in Lucknow, Uttar Pradesh. Initially, the plant will produce 2,500 electric vehicles annually, with plans to increase capacity to 5,000 vehicles per year over the next decade. The facility’s primary focus will be on manufacturing electric buses.
Tata Motors Ltd
On Thursday, Tata Motors Ltd. shares were trading at ₹979 on the National Stock Exchange, marking a 0.24 percent increase from the previous day’s close.
The company, valued at ₹3,25,567 crore, is a prominent global automobile manufacturer offering a wide array of vehicles including automobiles, trucks, buses, sport utility vehicles, and defense vehicles.
The company’s shares are down by 8 percent from its 52-week high of Rs 1,065.60 apiece to the current price.
Tata Motors has a strong global network with operations in India, the UK, South Korea, South Africa, China, Brazil, Austria, and Slovakia.
In 2024, Tata Motors supplied 100 electric buses to the Assam State Transport Corporation (ASTC) and 500 electric buses to the Delhi Transport Corporation (DTC).
Written by Omkar Chitnis
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