Avis India plans ₹550 crore FY27 capex, targets ₹700 crore revenue

Driven by corporate leasing, premium chauffeur-driven rentals and a shift towards organised fleet providers, Avis India, the Indian joint venture backed by Nasdaq-listed Avis Budget Group and The Oberoi Group, plans to raise capital expenditure by 175 per cent to ₹550 crore in FY27 from ₹200 crore in FY26 while targeting a 31 per cent increase in revenue to ₹700 crore from ₹535.5 crore.

“Last year, our capex was ₹200 crore. This year, it will be close to ₹550 crore,” Aman Naagar, Managing Director, Avis India, told businessline. “We have grown the business at about 20 per cent year-on-year,” he said.

Avis Budget Group indirectly owns 60 per cent of Avis India, while EIH Ltd, the listed flagship of The Oberoi Group, holds 40 per cent.

Avis operates about 12,000 vehicles, comprising nearly 3,000 cars in its rental business and 9,000 under operating leases. Its rental network spans 47 locations across 20 cities, while leasing extends across about 70 cities. The two businesses have more than 500 corporate clients.

Its leasing fleet has expanded about 45 per cent from 6,188 vehicles as of January 2025 to nearly 9,000 currently. Leases generally run for three to five years, allowing companies and employees to upgrade vehicles without assuming ownership and resale risks.

Vehicle selection is driven mainly by corporate customers. “As far as leasing is concerned, it depends on the customer profile and the kind of car the customer wants to lease,” Naagar said.

CARE Ratings has previously put its average vehicle-disposal age at 46-48 months. Proceeds from selling used cars exceeded ₹400 crore cumulatively over the five years through FY24, helping fund fleet renewal.

Unlike mobility companies that source most vehicles from local vendors, Avis owns its assets to control availability, maintenance and service quality.

“We believe in putting the metal on the road because that brings consistency in our service,” Naagar said. “We control the customer experience end to end—whether it is the car, the chauffeur or the service backend.”

The capital program will be funded through internal accruals and bank borrowings. Naagar said the company had a debt-to-equity ratio of around 1.6.

Avis estimates India’s corporate mobility market, including employee transportation, at close to $2 billion and expects it to reach $10-12 billion by 2031. Business travel, events and new global capability centres are expected to support demand.

“There are new customers we have acquired and customers who have shifted their requirements from local operators to an organised, structured player,” Naagar said.

The rental fleet is led by the Toyota Innova Crysta and Honda City, with the Mercedes-Benz E-Class anchoring the luxury offering. Avis owns about 150 Mercedes-Benz cars, which Naagar said made it the country’s largest organised E-Class rental-fleet owner. Mahindra vehicles are seeing the strongest leasing demand, although he did not identify individual models.

Avis will lease electric vehicles when customers request them, but EV adoption remains slower in premium rentals. Employee-transport vehicles may cover 7,000-8,000 km a month, allowing lower running costs to offset their higher prices. Avis’ chauffeur-driven cars typically cover only about 3,000 km, weakening that advantage.

The lack of spacious EVs comparable with the Innova Crysta or HyCross is another constraint. Residual values also remain uncertain because few EVs in India have completed their first three-to-five-year leasing cycles.

“Once volumes go up, there will be many more cars coming back after completing their cycle,” Naagar said. He expects used EVs to attract buyers shifting from internal-combustion cars or upgrading from two-wheelers.

Avis has also recorded 40 per cent year-on-year growth in overseas self-drive bookings. It does not plan to restart domestic self-drive because weekend-heavy demand produces utilisation of only 30-32 per cent, which Naagar said was economically unvi...