Craftsman Auto board OKs proposal for setting up new plant

Craftsman Automation on Wednesday announced that its board approved the proposal for setting up a new plant at Nagpur, Maharashtra.

The company's automotive powertrain segment currently has an existing capacity of 74 lakh nos (based on current product mix). The existing capacity utilization of automotive powertrain segment stands at an average of 70%.

The company proposes to add capacity of 8% to 10% in automotive powertrain segment based on current product mix.

The company aims to complete phase 1 in 24 to 30 months with an investment of Rs 115 crore. For phase 2, Craftsman Automation will target strategic expansion across auto segments of business. The timeline for phase 2 is 24 to 48 months with an estimated investment of Rs 110 crore.

The new plant is strategically located near the company's existing key customer in the auto sector and also enhances relationship as preferred supply partner. The plant will also free the capacity in Pune plant and benefit new manufacturing units in the region which will lead to lower cost structure.

The company said it will finance 90% of the project through term loan and balance through internal accruals.

Craftsman Automation is a diversified engineering company with vertically integrated manufacturing capabilities, engaged in three business segments, namely automotive-powertrain and others, automotive-aluminum products, and industrial and engineering. The auto ancillary company reported a 49% drop in consolidated net profit to Rs 24.07 crore on 19% fall in revenue from operations to Rs 435.19 crore in Q1 FY22 over Q4 FY21.

Shares of Craftsman Automation entered bourses on 25 March 2021. The stock was listed at Rs 1350, a discount of 9.4% to IPO price of Rs 1490 per share. The IPO of Craftsman Automation was subscribed 3.81 times. The issue opened for bidding on 15 March 2021 and closed on 17 March 2021. The price band for the IPO was set at Rs 1488-1490 per share.

Shares of Craftsman Automation were trading 0.7% higher at Rs 1,980 on BSE.

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