In a significant move to boost the adoption of electric vehicles in India, the Union Cabinet has recently approved the PM E-DRIVE and PM-eBus Sewa schemes. These initiatives are set to transform the public transportation landscape by promoting the widespread deployment of electric buses and offering substantial financial incentives.
As a result, shares of key players in the electric bus manufacturing sector, such as Olectra Greentech and JBM Auto, have witnessed remarkable gains.
Impact of PM-eBus Sewa scheme on stock prices
During today’s trading session, the stocks of Olectra Greentech and JBM Auto saw impressive surges, with increases of 5% and 8.7%, respectively. Olectra Greentech’s shares climbed to ₹1,699, while JBM Auto’s shares peaked at ₹2,093 apiece. This uptick in stock prices is directly tied to the positive market sentiment generated by the government’s support for electric buses through the newly approved schemes.
Details of the PM-eBus Sewa scheme
The PM-eBus Sewa scheme, in particular, has a dedicated budget of ₹3,435.33 crore and is aimed at facilitating the procurement and operation of electric buses by Public Transport Authorities (PTAs). Over 38,000 electric buses are expected to be deployed from the fiscal year 2024-25 to 2028-29, with a support duration extending up to 12 years from the date of deployment.
This initiative addresses several challenges previously faced by PTAs, such as the high upfront costs and lower revenue generation from electric buses compared to diesel or CNG buses. By adopting a public-private partnership (PPP) model under a gross cost contract (GCC), the scheme allows OEMs/operators to handle the procurement and operational aspects, with PTAs making monthly payments.
Ensuring payment security
To mitigate the risk of payment defaults, which has been a concern for OEMs/operators, the scheme includes a robust Payment Security Mechanism (PSM). This mechanism ensures that any defaults by PTAs are covered by CESL, the implementing agency, using the dedicated scheme funds. This security measure is likely to encourage more private operators to participate and invest in the deployment of electric buses.
Broader impact and electric 2-wheeler boost
The introduction of the PM-eBus Sewa scheme is expected to significantly reduce greenhouse gas emissions and decrease reliance on fossil fuels, aligning with India’s goals for environmental sustainability and enhanced urban mobility. Additionally, the Union Cabinet’s approval of the PM Electric Drive Revolution In Innovative Vehicle Enhancement (PM E-DRIVE) scheme extends similar benefits to electric two-wheelers and three-wheelers, further supporting the country’s transition to electric vehicles.
Investment opportunities
For investors looking to buy shares online, the surge in shares of companies like Olectra Greentech and JBM Auto highlights the potential for significant returns in the EV sector. These stocks not only offer a promising investment opportunity due to the government’s backing but also represent a commitment to sustainable and innovative transport solutions. As the schemes roll out and more electric vehicles hit the roads, companies involved in this transition are poised for growth, making now an opportune time to buy shares online.
The PM-eBus Sewa and PM E-DRIVE schemes are poised to revolutionise India’s public transport and electric vehicle markets. For investors monitoring these developments, buying shares online in related stocks could be a strategic move towards capitalising on India’s green mobility future.
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