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Tata Motors, Ashok Leyland, Eicher Motors stocks fall up to 9% amid reports of likely rise in truck load capacity

The report said the load carrying capacity of heavy trucks would be raised by up to 25%. This led to negative sentiments on the counters of truck manufacturers such as Tata Motors, Ashok Leyland and Eicher Motors on fears more goods could be transported via the same number of trucks which would hit the sales of these firms.

twitter-logo BusinessToday.In        Last Updated: July 17, 2018  | 10:00 IST
Tata Motors, Ashok Leyland, Eicher Motors stocks falls up to 9% amid reports of likely rise in truck load capacity

The stocks of truck manufacturers fell on Monday amid a report that the government was likely to raise load carrying capacity of trucks and tractor trailers tomorrow. A report in a business news channel said the government would notify new rules with respect to hiking load carrying capacity on Tuesday.

The report said the load carrying capacity of heavy trucks would be raised by up to 25%.

This led to negative sentiments on the counters of truck manufacturers such as Tata Motors, Ashok Leyland and Eicher Motors on fears more goods could be transported via the same number of trucks which would hit the sales of these firms.

The Ashok Leyland stock fell to intra day low of 120.55, falling up to 9.2% or over 12 points on the BSE.  

It closed 5.34% or 7 points lower at 125.75 on the BSE.

The firm offers a range of trucks, which include long haul trucks, mining and construction trucks, and distribution trucks.

The Tata Motors stock closed 4.77% lower at 251.55 level on the BSE.

The stock has been falling for the last four days and lost 8.66% during the period.

The stock was already facing selling pressure after global ratings agency Moody's downgraded the corporate family rating on Tata Motors due to the weakening credit metrics at Jaguar Land Rover (JLR).

Moody's Investor Services has downgraded Tata Motors rating to Ba2 with a stable outlook. Earlier, the agency had a Ba1 rating on the company.

Another truck maker Eicher Motors fell 0.88% or 243.95 points to 27,357 on the BSE.

 The stock hit intra day low of 27,051.05 falling 550 points or 2% on the BSE.

Shares of truck industry financer Shriram Transport Finance closed 3.29% or 41 points lower to 1212 level on concerns that lower truck sales would lead to lesser chances of financing truck buying deals.

"The gross vehicle weight of a two-axle truck would be raised to 19 tonne from the current 16.2 tonne. Gross vehicle weight of a three axle truck to be raised from 25 tonne to 28.5 tonne. Gross vehicle weight of a five axle truck to be raised from 37 tonne to 43.5 tonne. The vehicle weight of tractor trailer with respect to five axles to be increased from 44 to 49 per tonne, " the CNBC TV 18 report said.

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