Kabra Extrusion surges 16% on Rs 100 crore capex plan for its battery unit

The company's board has also approved a proposal to raise up to Rs 301 crore for the expansion of its future technologies brand Battrixx

Shares of Kabra Extrusion Technik hit a new all-time high of Rs 412.70, as they rallied 16 per cent on the BSE in Monday’s intra-day trade after the company announced capital expenditure (capex) plan of up to Rs 100 crore for expansion of battery division. The company’s board also approved a proposal to raise up to Rs 301 crore for the expansion of its future technologies brand Battrixx.

The stock of Kabra Extrusion has outperformed the market by surging 65 per cent, as compared to a 5 per cent decline in the S&P BSE Sensex, in past three months. In the last six months, the stock has zoomed 115 per cent, as against a 8 per cent rise in the benchmark index.

Of the Rs 301 crore, Rs 101 crore will be raised initially through issuance of warrants to promoters and foreign investors while Rs 200 crore will be mopped up through financial institutions for the working capital, the company said in a release.

Battrixx, part of Kabra Extrusion Technik, provides advanced lithium-ion battery packs with smart battery management systems to power the growth of India’s transition to green energy storage and electric mobility.

The promoters and other investors have shown the confidence to infuse more capital in Battrixx, which will be used to further the growth of the brand in the Electric Mobility sector. The company aims to reach 2 GWh capacity over the next 12-18 months.

These funds will enable Battrixx to enhance its annual production capacity in phases from existing 100,000 battery packs to 700,000 by end of FY24 to meet the growing demand in electric vehicles industry and other energy storage applications. The Board of the company has also approved to raise necessary additional working capital upto Rs 200 crore from financial institutes, Kabra Extrusion said in regulatory filing.

The lithium-ion battery market size in India is estimated to increase from 2.9 GWh in 2018 to 800 GWh by 2030. Globally, as per Fortune Business Insights the electric vehicle battery market Size [2021-2028] is to reach $ 154.90 billion in 2028 at a CAGR of 28.1 per cent in the 2021-2028 period.

In India, the Central Government has approved Phase-ll of its FAME Scheme with an outlay of Rs 10,000 crore over three years starting April 1, 2019, with 86 per cent of the budget allocated for incentives to create a demand for Electric Vehicles.