Summary
Daikin Industries, a prominent Japanese air-conditioning manufacturer, has announced a substantial investment of Rs 1,400 crore in its Indian subsidiary, marking its largest capital injection to date. This investment is aimed at bolstering local manufacturing capabilities regarding finished goods and components, as reported by The Economic Times. According to the recent regulatory filings made by Daikin Airconditioning India with the Registrar of Companies (RoC), this investment occurred in two distinct phases: an infusion of Rs 600 crore in June, followed by an additional Rs 800 crore in August. Following this second phase of investment, the paid-up share capital of the subsidiary increased to Rs 1,582.9 crore. Concurrently, the company augmented its authorized share capital from Rs 1,500 crore to Rs 3,000 crore in May, thereby accommodating future capital investments. These regulatory filings illustrate that the expanded authorized share capital will facilitate Daikin’s ongoing business growth, particularly the second phase of its manufacturing plant located in Sri City, Andhra Pradesh, and will simultaneously assist in reducing interest expenses. KJ Jawa, the Chairman and Managing Director of Daikin Airconditioning India, elaborated on the intended utilization of the funds, emphasizing that they will focus on enhancing manufacturing capacity, particularly for components such as compressors. Daikin’s objective is to increase the localization of its air conditioning units from 75% to nearly 90%, thereby strengthening its position in India’s production-linked incentive (PLI) scheme for air conditioners. Furthermore, Mr. Jawa highlighted that the Rs 1,400 crore investment will primarily support the construction of new facilities, foster research and development infrastructure, enhance skills training, promote the brand, and streamline internal operations. This strategic investment aims to fully leverage the capabilities of Daikin’s extensive 75-acre manufacturing site, which comprises a compressor and device manufacturing facility in Sri City. In conclusion, Daikin India operates within a competitive landscape in the Indian air-conditioning market, valued at Rs 30,000 crore, where it competes with established players such as Tata-owned Voltas, LG Electronics, and Lloyd, a branch of Havells. Through this investment, Daikin seeks to not only consolidate its market presence but also commit to fostering local manufacturing in India.
Original Source: www.business-standard.com
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