Shares of commercial vehicle manufacturers rose on the Bombay Stock Exchange (BSE) on Friday, a day after the government announced a budgetary provision of Rs 14,873 crore for Jawaharlal Nehru National Urban Renewal Mission (JNNURM) projects, mainly for the purchase of 10,000 buses.
While Tata Motors' shares moved up 1.2% to Rs 161, Ashok Leyland rose 4.5% to Rs 23 and Eicher Motors gained 0.3% to Rs 2,765 on the BSE.
The allocation is not going to end up as a one-time bonanza but will offer a larger opportunity for vehicle manufacturers since it is likely to be a permanent feature in forthcoming budgets during the 12th plan period ending 2017, said sources.
JNNURM envisages Rs 200,000-crore investment in improving urban amenities during the 12th Plan period, a significant portion of which will go into developing public transport facilities.
The industry, which largely depends on public sector entities, has been going through a bad phase after the large-scale purchase of 14,000 buses under JNNURM I ended in 2011.
"Tata Motors and Ashok Leyland have largely benefitted from the purchase in the first phase of JNNURM. Others such as Eicher, Mahindra & Mahindra and Force are now prepared to capitalise on this opportunity," said S P Singh, senior fellow, Indian Foundation for Transport Research and Training.
{{/usCountry}}"Tata Motors and Ashok Leyland have largely benefitted from the purchase in the first phase of JNNURM. Others such as Eicher, Mahindra & Mahindra and Force are now prepared to capitalise on this opportunity," said S P Singh, senior fellow, Indian Foundation for Transport Research and Training.
{{/usCountry}}Besides provision for purchase of buses, projects to improve urban transport such as bus shelters and dedicated bus corridors are also likely to push sales.