HFCL Limited has informed the Exchange about Capacity addition
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HFCL's Board of Directors has approved the establishment of a new Defence Manufacturing Facility in Sri Satya Sai District, Andhra Pradesh. The facility will manufacture Multi-Mode Hand Grenade (MMHG) and similar products with planned capacity of approximately 40 lakh units. The total initial capital outlay is around ₹230 crore, to be financed through internal accruals, debt, or proceeds from preferential issue of convertible warrants. The project is expected to be completed by December 2027. This move is part of HFCL's strategic expansion into defence manufacturing, aligning with India's Aatmanirbharta initiative for self-reliance in defence production.
The announcement signals HFCL's entry into defence manufacturing with significant capex, potentially diversifying revenue streams and positioning the company in the growing defence sector. However, the ₹230 crore investment over two years may impact near-term cash flows until the facility becomes operational.