Electrotherm chalks out Rs 300cr capex plan

Mumbai/Ahmedabad: Electrotherm, an Ahmedabad-based manufacturer of steel and electric bikes, is embarking on a Rs 300-crore expansion.

The capital expenditure would be infused across its engineering projects division, steel, power and electric vehicles divisions over the next one year.

The company is also expected to start manufacturing 60,000 to 70,000 lead acid batteries at a Chinese company's facility, with whom Electrotherm had tied up last year.

Electrotherm has a capacity of 25,000-tonne per month at its Samakyali manufacturing plant in Kutch. It is looking at expanding it to 35,000 tonne per month in the next few months.

Nearly Rs 80 crore will be pumped into its engineering projects business, where the company is planning to manufacture transformers soon, while around Rs 50 crore will be invested in its electric bike facilities. The rest will be infused into the company's steel and captive power facilities.

To fund its expansion, the company intends to offload nearly 12.5 per cent stake worth Rs 82 crore to DEG of Germany. Naveen Nakra, director (finance and projects), Electrotherm, said the final approval from the DEG board was being awaited.

Currently engineering projects division brings in Rs 300 crore, while electric bikes business is worth Rs 50 crore. The company draws maximum revenues to the tune of Rs 950 crore from its steel and TMT bar business.

To further consolidate its presence in the TMT bar market, Electrotherm has launched Electro CRS Gold, a corrosion-resistant steel bar. Targeted at major real estate projects, SEZs and other constructions, the product is around Rs 4,000 more than the market price of one tonne of TMT bar.

“Due to the vast coastal line and humid weather conditions in Gujarat and Maharashtra, where corrosion is a serious problem, we will make our corrosion resistant bars available there initially,” said Avinash Bhandari, director (operations), Electrotherm.

The company had earlier inked an MoU with Canadian firm Electrovaya to set up an advanced lithium super-polymer battery plant with a capacity of up to 10 MW hours a month. Bhandari said that modalities of the venture had not yet been drawn out.

Electrotherm, which registered a turnover of Rs 730 crore during the last financial year, expects to garner Rs 1,200 crore in the current fiscal.