Industry Outlook

Sector Overview

NBFCs in vehicle finance serve sectors like commercial vehicles, tractors, construction equipment, and passenger vehicles.

Growth Drivers

• Commercial Vehicle (CV) Upcycle:FY24–25 has seen a strong CV rebound driven by infrastructure push, mining activity, and e-commerce-led logistics demand.
  Light Commercial Vehicle (LCV) and used CV financing are key growth segments for NBFCs.
• Used Vehicle Finance Boom: Used vehicle financing is expanding rapidly, often offering higher yields (~16–20%) compared to new vehicle loans.
  Digital platforms and rural demand are enabling scalable used CV lending.
• Rural & Semi-Urban DemandTractors, two-wheelers, and small commercial vehicles see strong demand in Tier-2/3 cities and rural India.
  NBFCs dominate this market due to deeper regional reach and flexible underwriting models.
• Policy & Regulatory SupportRecent RBI guidelines push for better risk management and higher provisioning, leading to a more resilient NBFC ecosystem.
• Infra Projects: PM Gati Shakti, NIP fueling fleet demand

Future Outlook (FY26+)

• AUM Growth: ~Projected at ~12–15% CAGR over FY25–28 for leading vehicle-financing NBFCs.
• Consolidation: Smaller NBFCs may merge or partner with fintechs/Banks as regulations tighten.
• Digitization: E-KYC, digital onboarding, and telematics-based underwriting will reduce turnaround time and improve risk metrics.
• Diversification: Many NBFCs are expanding into LAP, MSME loans, or co-lending models to balance risk and enhance yields.

Latest Shareholding Pattern

Shareholder Category	Entity Name	Holding (%)
🏢 Promoter Group	Ashok Leyland Ltd.	61.12%
	Hinduja Automotive Ltd.	12.94%
	Hinduja Capital Ltd.	1.34%
	Aasia Corporation LLP	0.64%
	ESOP Trust (Employees)	0.09%
🔷 Subtotal – Promoters & Group		76.13%
🏦 Institutional Investors	Qualified Institutional Buyers	23.87%
🔸 Total		100.00%

It is a market leader in several countries being 4th largest in India, 2nd largest in Thailand, 3rd largest in Sri Lanka, and 5th largest in Bangladesh. It is currently in the works to expand its presence in the continent of Africa. The company has been building mobile handset design capabilities including industrial design, mechanical design, hardware design & software design. It has demonstrated quick and robust expansion since inception, showing profitability and growing sales since the first year of operations. Lava and Xolo are two brands that operate under the parent company. With ‘Create Possibilities’ as its guiding principle, Lava has embarked on an ambitious journey of becoming the 1st global consumer brand from India by empowering every human with quality innovative products. LAVA has a wide product portfolio that encompasses tablets, feature phones, and smartphones having various models in bar and touch form factors at multiple price points to suit all categories of consumers. The handset-maker a couple of years ago had 50 products (about 20 smartphones and some 35 feature phones) in its portfolio which has now brought down to less than 15 phones (five smartphones and nine feature phones). Lava has two manufacturing plants in India and the company claims to be the only Indian brand to design devices in India and do PCB SMT in its own factory. The Company has an in-house research and development center and manufacturing facilities in Noida.