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CHENNAI, Feb. 6

ASHOK Leyland Finance Ltd (ALF) expects to disburse credit worth about Rs 300 crore through its tie-up with Bharat Petroleum Corporation Ltd (BPCL). The tie-up, for a co-branded smart card, was announced here today.

The card, called SmartFleet, will be issued by BPCL and will operate on the infrastructure provided by the oil PSU. Truck owners can use the card to pay for their fuel purchases. When a customer uses the SmartFleet to buy fuel, ALF will pay BPCL and bill the customer. The credit period is typically one month, but for large value purchases, it could be higher.

According to Mr S.V. Parthasarathy, Executive Director (Operations), Ashok Leyland Finance, the company is looking at Rs 70,000-per-month-per-vehicle billing for about 50,000 vehicles — about Rs 350 crore, or at a conservative estimate, Rs 300 crore. But this is expected to happen only in the year after next, when the SmartFleet product would be operational in full swing. Mr Parthasarathy said that the margins on this business would be good.

Both ALF and BPCL are independently working towards enhancing the utility value of SmartFleet. ALF is in talks with major automobile spare parts distributors to enable customers use SmartFleet for their spare parts purchases. BPCL, on its part, is talking to other service providers (telephone, mobile phone), so that the SmartFleet can be used for making payments to the service providers too.

Asked how ALF proposed to fund the Rs 300-odd crore required for this line of business, Mr N. Sampath Kumar, Executive Director (Finance), said that ALF would use a mix of two different options for funding — debentures and securitisation. The company would raise some money through an issue of short-term unsecured debentures. Also, a part of the SmartFleet receivables would be securitised and sold to investors either on a bilateral arrangement, or through `pass through certificates'. "Raising Rs 300 crore, for Ashok Leyland Finance, is no big deal," Mr Sampath Kumar said.

"Currently, SmartFleet can be used at 1,800 outlets of BPCL, across the country. Over time, the number of outlets where it can be used would increase," Mr S. Ramesh, General Manager-Brand Management, BPCL, said.

He said that the SmartFleet was actually only co-branding of BPCL's PetroCard. In the last three years, the PetroCard has won over 10-lakh customers and fuel worth Rs 1,300 crore is sold through the card.

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