Indian Oil Corporation (IOCL) experienced a surge of 3.14%, reaching Rs 159.25, subsequent to the announcement of its collaboration with Sun Mobility, Singapore, forming a joint venture for the battery swapping business in India.
IOCL disclosed that its board of directors has greenlit the establishment of a joint venture entity dedicated to the battery swapping enterprise within India. This endeavor will be structured as a private limited company, with a precise 50:50 partnership between IOCL and Sun Mobility, Singapore.
The joint venture will primarily focus on providing battery-as-a-service solution (BAAS) for vehicles, including two-wheelers, three-wheelers, and four-wheelers, each weighing less than 2 tonnes (small format electric vehicle – SFEV).
The initial capitalization of the joint venture stands at Rs 2 lakh, comprising 20,000 equity shares valued at Rs 10 each, to be contributed equally by both partners.
Explaining the strategic rationale behind this move, IOCL highlighted the growth in India’s electric two-wheeler and three-wheeler markets. The adoption of battery swapping technology is anticipated to play a pivotal role in fueling the expansion of electric vehicles (EVs) in the country.
Indian Oil Corporation, a government-owned entity, holds a significant stake of 51.50% as of March 31, 2024. Despite this positive development, the company witnessed a downturn in its standalone net profit, which went by 51.90% to Rs 4,837.69 crore in Q4 FY24 compared to Rs 10,058.69 crore in Q4 FY23. Similarly, revenue from operations (excluding excise duty) saw a decrease of 2.47% to Rs 1,97,978.23 crore in the quarter ending March 31, 2024, down from Rs 2,02,994.07 crore in Q4 FY23.