JK Tyre on Wednesday announced an investment of Rs 240 crore by the International Finance Corporation (IFC), a member of the World Bank Group. The investment will be used to expand manufacturing capacities and integrate advanced, resource-efficient technologies in the production of commercial and passenger car radial tyres, which are expected to have better safety and longevity.
As part of the deal, IFC will receive a 5.6 percent stake in JK Tyres through the issue of compulsorily convertible debentures (CCDs) on a preferential basis. The investment is expected to help JK Tyres become a “green company” with sustainable use of energy and natural resources and robust ESG practices.
The investment will also support the company’s low-carbon strategy, reduce greenhouse gas emissions, and spur climate-smart initiatives through decarbonization and sustainability advisory. JK Tyre aims to increase the production of energy-efficient radial tyres by more than 10 percent, from 32 million to over 35 million tyres a year by 2025. This will be achieved through the use of resource-efficient technology, low-carbon solutions, and circularity.
Commenting on the investment, Raghupati Singhania, Chairman & Managing Director of JK Tyre, said, “We recognise the trust reposed by IFC in our company and are enthused to embark upon this new partnership. This investment will be utilised for the expansion of projects, which are not only growth-oriented but are also committed to promoting sustainable development and enhancing societal value creation.”
Wendy Werner, India Country Head at IFC, said, “Our partnership with JK Tyre will drive their capacity expansion and scaled manufacturing of energy-efficient tyres through resource-efficient tech, low-carbon solutions, and circularity. By signalling a long-term view of the industry, IFC aims to catalyse further investments and market competitiveness, and in so doing, contribute to India’s goals to become both self-reliant in domestic manufacturing and a global manufacturing hub. We are unlocking the potential of India’s manufacturing sector to drive job creation and sustainable growth.”
The investment is expected to bolster JK Tyre’s capital structure and increase the production of energy-efficient radial tyres, in line with the growing demand in India's automobile industry. The automotive industry accounts for almost 49 percent of India’s manufacturing GDP, with tyre manufacturers contributing to 2 percent, and demand is expected to grow further.
In addition to the investment in JK Tyre, IFC also announced an investment of Rs 600 crore into NewCo of Mahindra & Mahindra at a valuation of more than Rs 6,000 crore. These investments signal IFC's commitment to unlocking the potential of India’s manufacturing sector to drive job creation and sustainable growth while contributing to India’s goals of becoming both self-reliant in domestic manufacturing and a global manufacturing hub.
(Edited by : Vivek Dubey)
