Powergear plans Rs 50 crore capex

Powergear Ltd is planning to expand its production capacity for electrical equipment by more than double over the next three years by invest-ing around Rs 50 crore.

The company is investing Rs 10 crore for expansion of existing facilities and would set up a greenfield facility in India, said X Durairaj, chairman, Powergear Ltd.

“We are planning to invest around Rs 30-40 crore for a greenfield project in Tamil Nadu in next three years. We will look at raising funds through an IPO or private equity for the proposed investment,” he told Business Standard. The decision on fund raising would be finalised once its JV with Gestamp is established by end of 2011.

The Rs 140-crore company has four manufacturing facilities, one in Chennai, two in Bangalore and one in Hindpur, near Bangalore.

Its current capacity in various products is sufficient to supply energy generation sector for manufacture of 20,000 MW per annum. With the capa-city expansion and establishment of new plant, the company expects to cater to take it to 50,000 MW.

The capacity expansion would support the company to increase its presence in India. “At present, almost 75 per cent of our products are exported while only 25 per cent caters to Indian market. We are looking at a tremendous growth in India and the expansion would support us to cater the needs of the domestic market,” said Durairaj.