Hinduja Foundries (HFL), one of the major modern automotive jobbing foundries in India with an installed capacity of 125,000 tonne and part of the diversified Hinduja Group, is planning to come out with a rights issue to part finance expansion-cum-upgradation of its existing facilities in Chennai, Sriperumbudur and Hyderabad.
The company, which has been hitherto concentrating on the commercial vehicles segment, has decided to shift its focus towards the passenger car and tractor segments to spruce up growth, maket sources said. The company plans to raise a little over Rs 50 crore through rights mode by issuing 1,00,55,749 equity shares at a price of Rs 50 a share including a premium of Rs 40 a share, sources added.
The company’s castings are used in automobiles, industrial engines, power generators, tractors and defence applications. The product range includes cast iron and ductile iron components like cylinder blocks, cylinder heads, flywheels, flywheel housings, transmission casings, gearbox housings, hubs, clutch plates, brake drums, intake manifolds and clutch housings for commercial vehicles, passenger cars and tractors.
The company currently operates out of three facilities (two in Tamil Nadu and the other in Andhra Pradesh) with a combined capacity of 1.25 lakh tonne per annum. It has acquired 60 acres in Toopran (near Hyderabad) from the Andhra Pradesh Industrial Infrastructure Corporation for setting up a greenfield facility.
After a declined performance in the previous financial year with a net loss of Rs 12 crore due to slowdown in the auto sector, the company bounced back with encouraging net profits in the last two quarters of the current financial year.
As part of its future strategy, the company will leverage existing client relationships by expanding the breadth of services offered through its strong R&D abilities and technological initiatives. The company has come a long way from the traditional role of being a manufacturer of castings to getting involved in designing of new products.