The Economic Times of India reports that Iveco is believed to be holding discussions to sell its 15% stake in Ashok Leyland. European heavy truck maker Scania and a few other international commercial vehicle majors are said by industry sources to be interested.

Ashok Leyland is said to be planning to enter the LCV sector in the 2.5 tonne to 6 tonne category and is scouting for acquisitions in the international markets. It is also said to be planning to raise close to US$100-150m either by way of convertible bonds or debt.

The report quoted Ashok Leyland's MD, R Seshasayee, as saying that Volvo Truck is not picking up a stake in Ashok Leyland as had been widely rumoured.

Scania is said to be eyeing the Indian truck and bus market as a growth opprtunity.

India's market for trucks and buses is dominated by Tata Motors and Ashok Leyland.

Ashok Leyland's annual turnover exceeds US$1bn. It has a production capacity of 77,000 vehicles and 87,000 engines per annum.