Hinduja Leyland Finance to merge with group firm NxtDigital in 9 months

NxtDigital handles broadband, digital cable television, content syndication, teleshopping

Chennai-based Hinduja Leyland Finance (HLF), the finance arm of commercial vehicle maker Ashok Leyland, will merge with a listed group company called NxtDigital within nine months, a top company executive said.

NxtDigital handles the group’s digital and media businesses that include broadband, digital cable television, content syndication, and teleshopping. Hinduja Global Solutions will acquire the business from NxtDigital and it is awaiting regulatory approval. HLF will merge with NxtDigital after the approval.

“We expect the merger process between HLF and NxtDigital to be over within six to nine months. This will help us in meeting the listing plans and capital requirement,” said Sachin Pillai, managing director and chief executive officer of HLF. Ashok Leyland holds around 69 per cent stake in HLF.

HLF, after the merger, will mark its presence in diversified segments like freight, fuel and service aggregation through another subsidiary Gro Digital Platforms (GDPL), said Pillai. GDPL is an equal joint venture between Ashok Leyland and Hinduja Leyland Finance.

HLF’s assets under management is around Rs 31,000 crore and its CAGR grew around 34 per cent in the last six years. “We would like to maintain a 25-30 per cent growth on AUM and higher CAGR on our bottomline. Out of our total business, around 70 per cent is coming from vehicle financing,” Pillai said. On an overall basis, Ashok Leyland contributes to around 35 per cent of HLF portfolio--which is a combination of M&HCV (around 28 per cent) and small commercial vehicles.

The company said that it is looking to expand its presence in the entire eco-system of vehicles – owning, operating and selling through Gro Digital. It has already formed a digital platform called Gaadi Mandi for buying and selling used vehicles. 

Pillai said the vehicle sales are expected to come back on positive terrain during the third quarter of the current financial year. “Commercial vehicles have seen close to 15 quarters of de-growth. This is something that we have not seen in the past. When we saw some amount of relief coming in, we had the geo-political tensions coming in, which has brought in fresh sort of uncertainties. From February onwards, the issue of rising commodity prices and crude prices also affected the demand. We may see a recovery by the third quarter of the current financial year,” he said.