Voltas gains 4%; nears record high on JV with Hong Kong firm

Highly International and Voltas will hold 60% and 40% stake in the joint venture company, respectively, and the JVC would have equity capital of Rs 250 crore to be contributed in tranches.

Shares of Voltas jumped 4 per cent to Rs 1,325 on the BSE in Thursday’s intra-day trade after the company approved a proposal to enter into a joint venture (JV) arrangement with Highly International (Hong Kong) Limited. The stock of Tata Group consumer electronics company traded near its record high of Rs 1,356.90 touched on October 19, 2021.

Highly International is 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 air·conditioners, motors for inverter compressors, and their associated parts.

Highly International and Voltas will hold 60 per cent and 40 per cent stake in the joint venture company (JVC), respectively, and the JVC would have equity capital of Rs 250 crore to be contributed in tranches.

Voltas is going to invest Rs 100 crore in the next five years under the government PLI scheme to strengthen its RAC component manufacturing capability. We believe the joint venture will reduce the company’s dependency on Imports (imports contributes around 35 per cent of UCP sales) and at the same time strengthen its backward integration, ICICI Securities said in a note.

At 11:00 am; Voltas traded 3 per cent higher at Rs 1,310 on the BSE, as compared to 1.8 per cent rise in the S&P BSE Sensex. The trading volume at the counter nearly doubled with a combined 2.1 million equity shares changing hands on the NSE and BSE.