JBM Buys GLIDA Charging Network as Fortum Exits India

On Dec 29, the JBM Group announced it will acquire a majority stake in GLIDA, the Indian EV charging network of Finnish energy company Fortum Oyj. This marks Fortum’s complete exit from India, where it started operations in 2012.

Currently, GLIDA is operating 850 public charging points across 29 cities and 25 highways in 17 states. JBM Auto already manages a huge number of charging sites and holds a 35% market share in the electric bus segment. So, this move can be seen as a major consolidation approach.

The acquisition has arrived amidst the ₹10,900-cr PM E-Drive scheme. The scheme has allocated ₹2,000 Cr specifically for EV charging infrastructure. Moreover, India is targeting a 30% EV penetration by 2030.

Thus, the strategic background for this deal seems to be rooted in long-term vertical integration. But does this acquisition provide the necessary scale for JBM to outperform its peers in the high-stakes green mobility race?

Vertical Integration For EV Market Leaders

Sustainable transportation in India has been dealing with the "chicken-and-egg" dilemma for a long time now.

An important question is, “Should the vehicles come first, or the charging network?”

JBM Group is moving to acquire a pre-established charging giant. Thus, it is effectively solving this puzzle for its own fleet operations. This approach reflects the strategies of global leaders seeking to control the entire consumer journey.

So, when an automotive conglomerate owns both the manufacturing plant and the fuelling infrastructure, it can create a strong competitive advantage.

Furthermore, JBM’s presence in the electric bus segment is captivating the demand for its charging points. This integrated model can:

• Reduce operational friction
• Enhance the reliability of the fleet
• Ease government contracts and municipal partnerships.
• Allow the group to gather vast amounts of data on usage patterns, battery health, and peak demand cycles

A data-driven approach is important for energy management optimisation and reducing total ownership costs.

But could this integration be the push that triggers a considerable valuation re-rating for traditional automotive manufacturers moving into the new energy space?

GLIDA Acquisition To Reshape JBM’s Green Ecosystem

GLIDA has a legacy of advanced technology and strategic locations.

It was a part of a major European energy utility. The network brought with it international standards of inter-operability and customer experience.

JBM, with the GLIDA acquisition, can provide a seamless experience for both private car owners and commercial operators. With the network’s substantial presence on major highways and urban centres, the group can become the main facilitator of long-distance electric travel.

Within the Indian landscape, the exit of global utilities like Fortum brings unique challenges and opportunities.

With this acquisition, JBM can jump many stages of organic growth. The group can gain an immediate, nationwide presence. This rapid expansion is also important as the government is increasing its focus on public road transport electrification and high-density charging corridors.

Thus, JBM is positioning itself to be the main gateway for the energy needs of tomorrow’s commuters. But will the inclusion of recurring infrastructure revenue provide the downside protection that risk-averse institutional investors seek in a volatile market?

Long-term Valuation Re-rating

The long-term outlook for JBM Group seems to be shifting towards an infrastructure-heavy model.

The recurring nature of charging revenue differs from the one-time sales cycles of vehicle manufacturing. Typically, this shift can lead to higher valuation multiples. This is because the market cherishes the predictability and scalability of service-based income.

The "flywheel effect" is also evident. More charging points can lead to a higher confidence in electric vehicles. This, in turn, can lead to higher demand for JBM’s buses and cars and further increase the utilisation of the charging network.

Also, the competitive landscape is witnessing a "flight to quality." It is a known fact that smaller, under-capitalised players struggle to maintain and upgrade ageing chargers. But better access to capital can help them maintain high uptime and superior service levels.

Thus, JBM’s move to lock in an exclusivity pact suggests a high degree of confidence in the underlying assets and the strategic fit with their existing operations.

Sources:

Livemint
JBM Busses Official
Economic Times
PSA GoI