Enthused by positive order outlook, Mumbai-based KLT Automotive and Tubular Products, a Tier-I auto ancillary company, has drawn up a significant capacity expansion plan.
The plan will see it expand its presence in Tamil Nadu.
KLT Automotive is a leading maker of chassis frame for utility vehicle and trucks.
The plan envisages an investment in excess of Rs.250 crore for a Brownfield-cum-Greenfield expansion near Chennai.
According to Bhavin K. Thakkar, Chairman and Managing Director, nearly Rs.70 crore would be invested in further expanding the chassis frame plant located inside the Daimler India Commercial Vehicle manufacturing complex at Oragadam, near here.
The company would also be investing around Rs.150-200 crore to set up a state-of-the-art project, possibly at Sri City SEZ, to cater to the needs of 2-3 Japanese OEMs (original equipment manufacturers) coming up there.
These investments would come in over the next 2-3 years, he said.
Addressing a press conference here on Tuesday, M. S. Seshadri, Chief Executive Officer, said KLT laid store by global class facility, and worked for cost leadership.
“We are one of the six chassis frame makers in the world,’’ Mr. Thakkar said. KLT, he claimed, had a market share of about 75 per cent in India in this business.
To a question, he said, “we make our investments with an eye on long-term opportunity.’’ Though the commercial vehicle market was not doing well at the moment, he expected things to improve in the next one year or so.
They expressed optimism that the company would scale the Rs.1,000-crore revenue mark by the end of this fiscal.
To a question, they said the company was indeed contemplating to enter the capital market. An IPO (initial public offer) could happen in mid-2015, they indicated.
To a query, Mr. Thakkar said the expansion plan at the Daimler complex had to be read in the context of the truck maker’s decision to make its India operation an export hub to serve Asian and African markets with India-built Fuso trucks. KLT, he said, had already invested around Rs.170 crore in its facility inside the Daimler complex.
Mr. Thakkar and family held 74 per cent of equity in KLT Automotive. The balance is held by Reliance Capital, Enam and Rakesh Jhunjhunwala.
The expansion, Mr. Thakkar said, would be funded by a combination of debt and equity (60:40).
This article has been updated to incorporate the following correction:
It is KLT Automotive and not KTL Automotive as mentioned in the heading and in some paragraphs of a report KTL Automotive plans to step up investment in Tamil Nadu (“Business,” October 23, 2013).