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JBM to invest Rs 1,600 crore on solar power vertical

According to reports, JBM group’s ambitious 1,600 crore foray into solar power will be funded by a mixture of equity and debt.

The solar diversification, to be called JBM Solar, will conduct ground-mounted and roof top power projects. This is the second big diversification by the auto component manufacturer after its bus making facility.

“Our 1,600 crore investment in the solar business will comprise 25% equity and 75% debt,” said Nishant Arya, executive director, JBM Group. “The equity element will, initially at least, come from internal accruals.” The 1,600 crore investment is intended to cover 3 years and generation of 300 MW. Positioned as an independent power producer, the company is also looking at diversifying into wind energy and biomass in future. The solar business is expected to contribute 15% of total revenue at group level to JBM. Solar apart, the company is also lining up a capex of around 200 crore for capacity expansion for group company JBM Auto.”We will be enhancing capacity in different locations in FY15-16 and this includes the 100 crore we have earmarked for capacity expansion at our Chennai plants.” The company has four plants in Chennai – 2 at Maraimalainagar and one each in Oragadam and Sriperumbudur. As for the bus division, JBM Auto expects 15% of its revenue to come from this business, said Arya. “We are adding to the topline in FY16,” he said.

JBM Auto, which saw a 15% drop in net profit for the fourth quarter, took a hit on its bottomline due to tooling sales. “Tooling is a seasonable business and our profits would have dipped more if not for the improved efficiency and value addition in the components business which contributed a lot more to the bottomline,” said Arya.

In FY16, JBM Auto will “benefit from new model development. We are working in a big way on new model development and with double digit model launches in passenger vehicles, we expect a lot of action,” said Arya. The passenger vehicle industry should roll out 9-10 new models in FY16 in the passenger vehicles segment alone, he said.

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