Chalvik Fleet Leasing buys electric scooters and rents them to delivery riders. Work out the payback and the four-year return per scooter, and the utilisation at which the scooter fails to earn back its cost.

Each scooter nets Rs 4,500 a month, pays back in about 24 months, and returns 1.74x its cost over four years, an IRR of about 35%. The month-30 battery pushes cumulative cash back below zero until month 33, and the Rs 15,000 resale ends the scooter Rs 81,000 ahead. Below about 57.5% utilisation the scooter does not earn back its cost in four years, so utilisation is the number to diligence.

Think of an auto rickshaw owner who rents his vehicle to a driver by the day. What matters is how many days it is actually on the road, not the daily rate on the board. At Rs 250 a day and 80% utilisation, a scooter brings in Rs 6,000 a month, and after Rs 1,500 of maintenance and insurance it nets Rs 4,500. That monthly net is the engine of the whole case. Payback is Rs 1,10,000 over Rs 4,500, which is 24.4 months, a little over two years.

Track cumulative cash month by month rather than stopping at payback. By month 30 the scooter is only Rs 25,000 ahead, so the Rs 40,000 battery takes it back to minus Rs 15,000, and it does not pay back for good until month 33.3. A payback figure that ignores the second big cost tells an investor the asset is safe a year before it really is. After that, eighteen more months of Rs 4,500 and the Rs 15,000 resale leave the scooter Rs 81,000 ahead at month 48.

Total inflows of Rs 1,91,000 on Rs 1,10,000 is 1.74x. Because the money comes back steadily, the IRR on the monthly cash flows is about 35% a year, before tax and before the cost of borrowing to buy the scooters. The scooter just earns back its cost when 48 months of net rent cover the purchase, the battery and nothing more: Rs 1,10,000 plus Rs 40,000 less Rs 15,000, spread over 48 months, plus Rs 1,500 of upkeep, needs Rs 4,312 of rent a month, which is 57.5% utilisation. At 60%, the scooter ends only Rs 9,000 ahead and earns about 3.8% a year, well below what the debt funding a fleet usually costs.

Utilisation first, by month of the scooter's life and by city, because a new scooter rents easily and an old one sits idle more. The gap between 80% and the 57.5% breakeven is the whole margin of safety, so you want to see it measured across a full year, including monsoon months when riders stop. Then the battery: if it lasts 24 months instead of 30, the dip comes earlier and the return falls. Then the resale value, which depends on a second-hand market for electric scooters that is still thin. This is why fleets like Chalvik are usually funded with venture debt or asset finance secured on the scooters, with equity paying for the platform: the scooter return is a lending return, not a venture return, and a fund should not pay a software multiple for it.