Hero Electric mulling new plant in south India

Hero Electric is mulling a greenfield plant in south India and has firmed up a capex of around Rs 700 crore to ramp up production, a senior company official said on Monday.

"We have a production unit at Ludhiana, Punjab. Expansion can happen there or in other locations. We may opt for a greenfield second plant somewhere in south India," Hero Electric CEO Sohinder Gill said here on the sidelines of the launch of three new models.

He said recent tax sops announced by the government will also come into play while making a decision on the new plant.

In a major fiscal booster, the government on Friday slashed effective corporate tax to 25.17 per cent inclusive of all cess and surcharges for domestic companies.

In effect, the corporate tax rate will be 22 per cent for domestic companies, if they do not avail any incentive or concession.

Gill said the company will pump in Rs 700 crore over the next three-four years in both manufacturing and other allied areas.

"We will be increasing capacity from 60,000 to 1.25 lakh units in a year at an investment of Rs 200-250 crore before augmenting it further," he said.

Gill also said that the change in subsidy norms under FAME-II had led to lower sales of subsided electric scooters.