2 min read.Updated: 20 Sep 2021, 05:43 AM ISTAgencies
According to Welspun India, in the current financial year, it has invested ₹281 crore in capex and the total investment during FY'22 will be ₹750 crore
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Welspun India Ltd., which says it makes every fifth towel sold in the U.S., will spend 6.57 billion rupees ($89.4 million) to boost manufacturing capacity to meet overseas demand, the company said.
It will increase towel manufacturing capacity at its Anjar plant in western India by 20% to 102,000 tons a year, the Mumbai-based textile company informed in an exchange filing Saturday evening. It also plans to expand capacity of making rugs by 80% at its Vapi plant.
The investments will be spread through March 2023, and will start accruing benefits from the April quarter of 2022 with an annual revenue potential of about 12 billion rupees from second year of operation, it said. Welspun maintains its net debt guidance of 24 billion rupees for the financial year through March 2022.
Separately, its unit Welspun Flooring Ltd. will invest an additional 1.44 billion rupees toward de-bottlenecking of its Telangana plant in southern India, which also includes a new 25-megawatt renewable power plant.
At Vapi, the company has commenced expansion of rugs capacity expansion by 80 per cent during the last financial year.
"The company is expected to invest ₹656.5 crore for the aforesaid expansion over FY'22 and FY'23," it said.
The benefits of these expansions will start accruing in phases from Q1 FY'23 onwards, it added.
"This expansion has a revenue potential of ₹1,207 crore from the second year of operation," it added.
Besides, the board of its subsidiary Welspun Flooring Ltd has also approved a capex of 143.6 crore.
"The board of the wholly-owned subsidiary company, Welspun Flooring Ltd, at its meeting held on September 18, 2021, approved capex of ₹143.6 crore to be invested over FY22 and FY23...," it said.
This is for de-bottlenecking and rebalancing of its facility at Telangana, including setting up of a 25 MW renewable energy power plant and to further the group's commitment towards ESG by embedding sustainability and circularity at every stage of its value chain.
According to Welspun India, in the current financial year, it has invested ₹281 crore in capex and the total investment during FY'22 will be ₹750 crore including the investment approved by the board on Saturday for the home textiles and flooring businesses.
"There is no change in the company's guidance for the current financial year for Net Debt position i.e., ₹2,400 crore as on March 31, 2022," it said.
Welspun India is a part of Welspun Group, a conglomerate which has businesses interests in sectors including - Line Pipes, Home Textile Products, Infrastructure, Warehousing, Steel, Oil & Gas, Advanced textiles and Flooring solutions.
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