Japan’s leading air conditioner manufacturer Daikin Industries has made a major investment of Rs 1,400 crore in its Indian subsidiary.
This marks its largest capital injection to date, aimed at improving local production of finished goods and components, according to a report by Economic times.
Daikin Industries: investment details
According to recent regulatory filings filed by Daikin Airconditioning India with the Registrar of Companies (RoC), the investment was executed in two phases – Rs 600 crore in June and Rs 800 crore in August.
Following this second phase, the paid-up share capital of the subsidiary has increased to Rs 1,582.9 crore. The company also increased its authorised share capital from Rs 1,500 crore to Rs 3,000 crore in May, leaving room for future capital infusions.
These filings reveal that the increase in authorized share capital will support Daikin’s continued business expansion, including the second phase of its plant in Sri City, Andhra Pradesh, and help reduce interest expenses.
Daikin Industries: Strategic Expansion
KJ Jawa, president and managing director of Daikin Airconditioning India, said the funds will be used to enhance manufacturing capacity, with an aim to boost production of components such as compressors.
Daikin aims to increase localization of its air conditioners from 75 to nearly 90 percent, reinforcing its leadership in India’s production-linked incentive (PLI) scheme for air conditioners.
Jawa further noted that the Rs 1,400 crore will primarily go towards funding construction, infrastructure research and development, skill development, brand promotion and internal operations. The investment is aimed at maximising the potential of its 75-acre manufacturing facility, which includes a compressor and device factory in Sri City.
Daikin India competes with major players in India’s Rs 30,000-crore air conditioning market, including Tata-owned Voltas, LG Electronics and Havells-owned Lloyd.
First published: September 20, 2024 | 12:40 pm IS
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