dipped 8% to Rs 1,261 on the BSE in early morning trade after the company said its board approved capital expenditure (capex) plan of Rs 17 billion in US and India. The entire capex
would be funded via a mix of debt and internal accruals.
The stock was trading lower for the third straight trading sessions, down 14% from its all-time high of Rs 1,467 recorded on Wednesday, August 29, 2018, in intra-day trade. It had outperformed the market in past one month by surging 20% as compared to 3.7% rise in the S&P BSE Sensex till Tuesday.
“The board of directors of the company at their meeting held on Saturday, September 1, 2018, has approved a capex
plan of up to $ 100 million for setting up a Greenfield tire plant in the USA through a wholly owned subsidiary to be set up,” Balkrishna Industries
said in a statement.
The Company shall also incur capex
of up to Rs 10 billion for its Indian Operations. The entire capex
will be completed within a period of 30 months. This is in addition to the current capex
underway for the carbon black plant, it added.
said its see increased traction in sales volume in Americas over the next few years. The current sales volume has been around 30,000 MT. The board, therefore, approved setting up of a Greenfield project with a capacity of 20,000 MT p.a. The USA project will be funded via investments from the Parent Company and local debt.
Looking at the overall demand in the higher diameter segment, the board has approved a capex
of up to Rs 5 billion towards setting up a new line of 5,000 MT p.a. for layers of all steel radial OTR tires and additional mixing line in Bhuj, Gujarat. The capex
for setting up of the new state of the art facilities in Waluj, Maharashtra will be approximately Rs 5 billion including a Co-generation plant and in-house warehousing facilities for raw materials and finished goods, it added.
At 10:32 am; Balkrishna Industries
was trading 6% lower at Rs 1,282 on the BSE against 0.3% rise in the S&P BSE Sensex. A combined 1.08 million equity shares changed hands on the counter on the BSE and NSE so far.