The company will seek borrowings of Rs 320 crore from the IDBI, the ICICI and the IFCI, while the balance will be raised from internal accruals and a Rs 56-crore from rights issue, company executive director A Sankara Narayanan said.

The new Rs 44-crore plant at Pithampur will manufacture 7,000 rural transport vehicles (RTVs), designed to suit driving conditions in rural India. Commercial production will begin in a month and the company hopes to achieve a breakeven at 4,500 units.

Manufactured in technical collaboration with the Oka Motor Company of Australia, the RTV will cost Rs 3.42 lakh in Haryana and around Rs 3.33 lakh in Madhya Pradesh. Oka has been involved in the design and development of the vehicle. The first RTV was rolled out on Tuesday by state chief minister Digvijay Singh.

The heavy-duty vehicle with a rear wheel drive has a powerful four cylinder, 1995cc, 56hp fuel-efficient diesel engine which allows a payload of up to 1.5 tonnes. Another key feature is a dual function gearbox (with four high and four low gears) which allows it to run at a continuous low speed of 5 km per hour on dirt tracks and at a cruising speed of 90 km per hour on normal roads.

Executive vice-president R Santhanam said, the company has worked out a new marketing strategy for the RTV, the Contessa and the Lancer. The blue line network will sell the Ambassador and Contessa in cities and towns, the red line in major cities will sell the Lancer and the green line will vend the RTV and Trekker in semi-urban and urban areas. All networks, in addition to selling specific products, will also service and store spare parts for the whole range of Hindustan Motors products.

Santhanam said that seven belts including Madhya Pradesh, Punjab, Haryana, Uttar Pradesh and Andhra Pradesh have been identified for developing the company's dealership network.