A JSW Group subsidiary bid in the recently concluded tender by the Centre for 6,230 electric buses and although it did not win any orders, it marked the entry of the steel-to-energy conglomerate in a tightly contested market and conveyed its intent to expand its presence in the segment.
JSW Eco Mobility Pvt. Ltd, the group’s bus operator, submitted bids across all five cities and undercut legacy companies Tata Motors, Olectra Greentech, JBM and Ashok Leyland, according to data for the government’s latest tender that Mint reviewed. The JSW arm was the second or third-lowest bidder in at least four cities: Pune, Ahmedabad, Hyderabad and Delhi.
The bids were made as JSW prepares to launch its first electric bus within a year and simultaneously gears up for the debut of its electric and hybrid passenger vehicles. JSW Greentech, the builder of the group’s e-buses headed by chief executive officer Sumit Mittal, secured a Type Approval Certificate for one of its upcoming models, indicating compliance with safety, technical, and performance standards.
“The company is setting up its plant, and we expect them to become more active and aggressive in the market in the upcoming tenders,” a senior industry executive said.
So far, details of JSW’s e-bus business have been scarce and most of the focus has been on setting up the capacity of JSW Motors Ltd, the electric and hybrid passenger vehicle company.
JSW’s participation in the e-bus tender and its pricing suggest that the conglomerate is now trying to build up the bus entity’s order book so that it can begin production. Bidding in such tenders is crucial because private demand for EVs remains limited, which makes the state and central governments the biggest customers.
Operators, manufacturers
The e-bus tender from Convergence Energy Services Ltd (CESL) called for bids from bus operators. The winning operators will acquire buses from manufacturers and run the service, for which the states will pay them on a fixed running cost basis for 10 years under a gross cost contract (GCC) model.
“Our participation in the CESL electric bus tender under the PM E-Drive programme is a natural step," said a spokesperson for JSW Greentech, the parent company of JSW Eco Mobility. “However, in a GCC model spanning 10-12 years, success is determined not merely by the lowest price, but by the ability to deliver and operate buses.”
Once it wins contracts, JSW would become the fourth conglomerate to have a presence in the bus segment after Tata, Mahindra and the Hinduja Group.
The entry of a major conglomerate in India's e-bus ecosystem will only make the sector more competitive, according to Shyamasis Das, a research fellow at New Delhi-based think tank Center for Social and Economic Progress.
"If the new company is an established entity, there is credibility attached to it. The sector becomes more competitive as a whole. The aggressive strategy used by the company, signalled by participation in all city lots at fairly competitive prices, shows they are in it for the long run," said Das, who leads the electric mobility research vertical at CSEP.
"The increasing competition indicates that the market is maturing towards electric buses as the future of public mobility,” the JSW Greentech spokesperson said. "Our bidding approach is therefore pragmatic and focused on sustainable economics that create long-term value for all stakeholders. We design in India to make in India."
For billionaire Sajjan Jindal, the automobile sector marks its newest bet after JSW started its journey in steel and then expanded into infrastructure, energy and ports, among other businesses, over the past four decades. The JSW Group has infused ₹3,000 crore into its automobile business and tripled its borrowing limit to ₹15,000 crore, Mint reported on 26 May.
The e-bus tender floated by government clean energy agency CESL concluded on 13 May. New-age companies Eka Mobility and PMI Electro Mobility emerged as the largest winners, securing over two-thirds of the country’s third-largest tender for 6,230 electric buses.
The latest win comes about six months after they emerged as the leading companies with more than a two-third share in the country’s largest tender for 10,900 e-buses, Mint reported 13 May.
