Welspun India is seeking to invest Rs 800 crore to expand its capacity of home textiles and flooring businesses over the next two years.
An investment of Rs 656.5 crore would be made by the company on its home textiles business expansion during FY’22-23. It will aid in expanding towel manufacturing capacity by 20 per cent to meet the demand from overseas customers.
“The company is expected to invest Rs 656.5 crore for the aforesaid expansion over FY’22 and FY’23,” it said.
Board members on Saturday approved the plans to boost towel manufacturing capacity at its Anjar, Kutch (Gujarat)-based plant to 1,02,000 metric tonnes per annum (MTPA) from the existing 85,400 MTPA.
“Keeping in view the recent trend of customers focuses to track the entire value chain i.e., ‘Farm to Shelf’, the board has approved an investment in 40 looms for towel fabric at Anjar which represents 7 per cent of installed capacity,” said Welspun India in a regulatory filing.
The board has also approved an additional investment concerning automation for faster production turnaround for a lower cost at its Valsad (Gujarat) based plant.
At Vapi, the company started to expand the rugs capacity by 80 per cent during the last financial year.
The benefits of such investments will begin reflecting in phases from Q1 FY ’23 onwards, it added.
“This expansion has a revenue potential of Rs 1,207 crore from the second year of operation,” it added.
Besides, Welspun Flooring Ltd’s board has also approved a capital expenditure of 143.6 crore.
“The board of the wholly-owned subsidiary company, Welspun Flooring Ltd, at its meeting held on September 18, 2021, approved a CAPEX of Rs 143.6 crore to be invested over FY22 and FY23…, it said.
According to Welspun India, in the current fiscal, it has invested Rs 281 crore in capital expenditure and in the next fiscal, it will amount to Rs 750 crore including the investment approved by the board on Saturday in regards to 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., Rs 2,400 crore as on March 31, 2022,” it said.