Also, this should be viewed as a “one-off” and Ashok Leyland “has no plans to bankroll” its subsidiaries or make any further acquisitions. Ashok Leyland has declined 4.26% to Rs80.75 since the announcement of the merger. The decline has been far steeper at Hinduja Foundries. “Ashok Leyland will have to fund future losses and capex of Hinduja Foundries, which will be a drain on its cash-flows,” the analyst said. Hinduja Foundries makes castings, cylinder blocks and heads and other critical parts, and counts Ashok Leyland among its key customers, accounting for more than a third of its revenues.

Source: Mint September 18, 2016 17:37 UTC