BackAC maker EPACK to raise ₹160 crore from ICICI Ventures
The infusion of fresh equity capital will help the contract manufacturer expand its capacity
PremiumMUMBAI : EPACK Durable Pvt. Ltd, India’s second largest contract manufacturer of room air-conditioners (RACs), will raise ₹160 crore from funds managed by private equity firm ICICI Ventures, as it plans to expand its manufacturing capacity significantly, top company executives said.
EPACK has manufacturing facilities in Dehradun, where it manufactures RACs and small household appliances (SHAs) for leading Indian and multinational company brands, as an outsourced design manufacturer with in-house R&D (research and development) capabilities.
It has an installed capacity of over 1 million RAC and 1 million SHA units.
The infusion of fresh equity capital will help the company expand capacity and focus on backward integration with addition of capacity for multiple components.
The company targets to increase its RAC capacity to 3 million units per annum by 2025, to capture the growing demand of RACs in India and cater to the needs of export markets as well.
“RAC penetration in India is lowest with penetration in 7-8% households only. Over the last two decades, EPACK has been building manufacturing capabilities to manufacture room air-conditioners and small home appliances. We have built strong business relationships with all key brands. The new capital will help us deepen our manufacturing and R&D capabilities, and gain more market share over the next 4-5 years," Sanjay Singhania, promoter director, EPACK Durable said in an interview.
The company manufactures a complete range of room air-conditioners, including window ACs and split ACs, with the latest technology, including fixed speed and inverters.
The company also manufactures home appliances, including induction cooktops, mixer grinders and water dispensers.
The company plans to invest ₹500 crore in the next 4-5 years to expand its capacity and is already in the process of setting up a greenfield manufacturing facility near Bhiwadi in Rajasthan, which is expected to be commissioned in the third quarter of the current financial year.
It has also announced plans for setting up a greenfield manufacturing plant in South India, which is expected to be operational by Q3 of 2022.
The company aims to increase its capacity to 2.6 million by the end of 2022, said Singhania.
The company ended FY21 with a turnover of ₹760 crore and is aiming to hit a revenue of ₹1,100 crore in FY22, said B.L. Bothra, chairman of EPACK Durable.
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