The Hindu Business Line : Omax earmarks Rs 100 cr for acquisitions, capex

THE Rs 478-crore auto ancillaries company, Omax Autos, has earmarked more than about Rs 100 crore towards acquisitions outside India as well as for capacity expansion.

The company plans to spend Rs 40-50 crore towards acquiring an auto components company based either in Europe or the US.

"We are actively looking for an acquisition this fiscal and are in talks with about 3-4 companies for the same. Out of the amount earmarked for the acquisition, about Rs 20-25 crore will be through internal accruals, while the balance would be through debt," said Mr Naresh Tandon, Executive Director (Finance).

Incidentally, the trend of domestic auto component firms acquiring firms outside India has been strengthening with firms such as Amtek and Bharat Forge announcing acquisitions in Europe over the past year.

Omax would also be pumping in more money at its sixth plant coming up in Bangalore in light of positive demand signals from players based in the region.

The company has already spent about Rs 17 crore on the Bangalore facility for export of machine components to Delphi. The plant is set to commence production this week.

Meanwhile, with the second round of expansion which would take place later this fiscal, the total investment on the plant would go up to Rs 35 crore.

"We will start making press and tubular components to cater to the South-based auto players such as TVS, Toyota, and Sundaram Clayton among others. Currently we are supplying to these companies from our Haryana plant," Mr Tandon said. The plant would also subsequently be utilised to export parts to Teneco.

In the first year of operations, Omax expects the plant to generate a turnover of about Rs 10-15 crore, and Rs 70-100 crore in the next 2-3 years.

In light of growing exports, Omax would also be investing about Rs 35-40 crore towards adding further capacity at its Haryana plant.

Exports account for only about Rs 25 crore of the company's turnover, but are expected to jump in the near future.

Omax is already exporting to companies such as Delphi, Cummins, Rolands Braking, Piaggio, and Teneco, among others.

More Stories on : Mergers & Acquisitions | Automobile Components

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