Him Teknoforge, an unlisted Rs. 200-crore company, has received funding from Canbank Venture Capital Fund Ltd. (CVCFL).
Continuing its strategy of investing in unlisted companies with high growth potential, CVCFL, through its Emerging India Growth Fund, has picked up a minority equity stake in Him Teknoforge Ltd. (HIM) for a consideration of Rs. 30 crores. This investment includes Rs. 7.80 crores towards partial buyout of equity shareholding held by IFCI Venture Capital Funds Ltd. and Rs. 22.20 crores towards expansion and buying of modern machineries.
HIM is a leading manufacturer of forgings and machined components for end use in agri-machinery, automotives, railways, defense and oil & gas sectors. The product range covers gears, axles, shafts, levers, flanges, assemblies, sub-assemblies, non-gear / spider kits, etc.
Explaining the reason for investing in the company, Mr. K. Baskaran, CVCFL Managing Director, said: “The company envisages good business potential in widening its product and customer base by undertaking modernization-cum-technology upgradation and expansion at its existing plants. The proposed capex will help the company in meeting the demands of its existing customers for the machined components. This will enhance the value addition of HIM’s operations.”
Forging perfection
The Indian forging industry has emerged as a major contributor to the manufacturing sector of the Indian economy, estimated at more than $3 billion currently, and about 20-25 per cent of the size of the forging industry is attributed to exports. A good progressive management will take HIM to greater heights.
Mr. Rajiv Aggarwal, HIM Executive Director, observed: “We have been looking for funds to expand/upgrade our operations to achieve the full capacities of the units and also to enhance the product value / branding, besides, increasing our share of business from the existing customers as well as adding new customers. HIM is able to offer competitive prices due to its presence in the excise-free zone at Baddi (HP) and its proximity to major manufacturers of tractors and commercial vehicles who constitute about 75 per cent of the company’s business”.
The funds from CVFCL would be deployed by HIM towards modernization/additional plant and machinery and tools & dies at its existing forging and machining units.
HIM has grown considerably over a period of time and is known for its cutting edge technology, established quality processes and overall engineering capabilities. The company is playing a significant role in the agri-machinery, automobile and engineering industry. It has integrated facilities, including in-house quality assurance and testing infrastructure.
HIM caters to major OEM clients like Mahindra & Mahindra Ltd., Escorts Ltd., International Tractors, Preet Agro, AVTEC and Indo Farm Industries in the agricultural sector, and Ashok Leyland, SML-Isuzu, Bharat Gears, VE Commercials and the Oerlikon Group in the automotive sector, besides Indian Railways & Defence. It keeps expanding its customer base and has recently added other prominent customers such as ZF Steering and Brakes India.
The company is planning an IPO sometime in the next two-three years.
‘We will soon roll out an e-rickshaw that can run 80 km a day on one charge’,
– Mr. Rajiv Aggarwal, Executive Director, HIM
You have said that the new investment will go for the existing plant of Baddi and Pithampur. Could you give us an idea of the current manufacturing capacities here?
The current capacity is 27,000 tonnes of forgings and 19.8 lakhs of components per annum. With this investment we will get modern machineries to upgrade our capacities, and the units produced will get enhanced by 1000-1200 tonnes of forgings per year and around 30,000 components per annum.
What are the products that you work for in the automotive sector, particularly for commercial vehicles and farm equipments?
We are capable of manufacturing propeller shaft components, kingpins and repair kits, coupling lever and flanges, differential cage, axle shafts as well as bevel parts and assemblies. Our products are designed to cover a large spectrum of needs across industries, including auto and non-auto.
What about the new products or technology that you are planning to bring in the commercial vehicle segment?
We are working on an e-rickshaw and will be announcing more details about it soon. Today pollution is a big issue, and it is a task addressing the environmental challenges and reducing the human toll in cities like Delhi. It would be a good mode of transport at least for a small distance travel. This vehicle on one charge will run around 80 km, which should be sufficient for short-distance travel.