GS Auto International Ltd, an automotive component maker, is seeking private-equity funding of more than INR 50 crore to carry out a part of its expansion plans.
According to market sources, the company is in talks with a Norwegian fund, for an investment of around INR 60 crore, and the investment deal is likely to be signed in January.
GS Auto’s Managing Director, Surinder Singh Ryait, confirmed that the company was in negotiations with a European private equity firm for investment. “We aim to bring in private investments of over INR 50 crore by the end of this financial year,” he added.
The Rs. 130-crore company has manufacturing units at Ludhiana and Jamshedpur for forged, machined and cast components, such as suspensions and axles, of commercial vehicles. The MD said the company is planning to produce automotive safety gadgets (air bags).
“We are looking at the possibility of setting up such manufacturing facility in the next one year at our Adityapur unit, near Jamshedpur. We also have a long-term plan for making (unpowered) trailer units. We intend to set up such manufacturing capacity at Ludhiana in the next five years,”he added.
GS Auto has recently begun to commercially produce ferrous and non-ferrous cast automotive parts at its Jamshedpur plant. The project cost incurred was INR 64 crore. The capital expenditure was met by combination internal cash flow and borrowings. Owing to high interest cost (INR 4.58 crore), it reported a net loss of INR19 lakh in 2013-14.
The company was also expanding its retail presence. The company has opted for private-equity funding to curtail finance costs.