SRF Limited has informed the Exchange about Capacity addition
SRF · price
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SRF Limited's Board has approved setting up a new BOPP (Biaxially Oriented Polypropylene) Film manufacturing facility at Indore, Madhya Pradesh, with a projected cost of Rs. 490 Crores. The company is currently operating at 100% capacity utilization on its existing 110,000 MTPA BOPP film capacity, and the new plant will add 60,000 MTPA (about 55% increase) over the next 24 months. The investment will be funded through a mix of debt and internal accruals. The rationale given is to meet rising customer demand, suggesting strong order books or market growth in the packaging films segment.
Positive for medium-term growth as the company is adding significant capacity (over 50% increase) to capture demand in a fully utilized business. However, shareholders should note the Rs. 490 Crore spend involves debt component, and returns will only flow after the 24-month project completion period.