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Fluidomat Ltd has approved a major modernization and expansion plan to boost production of higher range couplings. The Board has sanctioned an investment of approximately Rs. 3,500 lakhs (Rs. 35 crore), to be funded entirely through internal accruals with no debt. The expansion will add 2,000 couplings to the existing capacity of 1,500 couplings annually, and is expected to be completed within 2-3 years. The project includes modernizing aluminum and CI foundries, installing modern CNC machines, setting up high KW rating couplings testing beds, building a material testing laboratory, and undertaking 86,988 sqft of civil construction. The company is also eligible for a 40% capital subsidy on production machines and civil construction, which will reduce the effective cost of the project.
This expansion signals management's confidence in long-term demand growth and aims to capture new geographical and foreign markets. Since it is funded by internal accruals, the balance sheet remains unleveraged, and the 40% government subsidy improves the effective return on this investment, though benefits will accrue gradually over the 2-3 year execution period.