Voltas signs JV pact with Highly International to manufacture compressors

The Tata group firm has executed the joint venture agreement on April 30, 2022 with Hong Kong-based Highly International

Leading air conditioner maker Voltas Ltd on Monday announced that it has entered into a partnership to set up a joint venture with Highly International (Hong Kong) Ltd to manufacture compressors in India.

The Tata group firm has executed the joint venture agreement on April 30, 2022 with Highly International (Hong Kong), a wholly-owned subsidiary of Shanghai Highly (Group) Company, "to engage in the business of design, development, manufacture, marketing, sale and service of inverter compressors" for room AC, motors for inverter compressors and their associated parts, Voltas said in a regulatory filing.

The agreement also includes sourcing of raw materials and components required for manufacturing these products, it added.

However, this would be subject to "fulfilment of certain conditions", which includes obtaining necessary approvals, including PN3 (Press Note 3) approval, said Voltas.

Through PN3, the government had made its prior approval mandatory for foreign investments from countries that share a land border with India in order to curb opportunistic takeovers of domestic firms following the COVID-19 pandemic.

Countries that share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan. As per that decision, FDI proposals from these countries need government approval for investments in India in any sector.

In the JV, Highly International (Hong Kong) will have 60 per cent shareholding while the rest is to be owned by Voltas.

The proposed JV will have an equity capital of Rs 250 crore to be contributed in tranches by the partners.

For the financial year ended on March 31, 2021, Voltas had a revenue of Rs 6,251.65 crore.