CG inaugurates new Motor manufacturing facility “Smart LV Motors” at Ahmednagar
Mr. Vellayan Subbiah, Chairman CG Power and Industrial Solutions Limited inaugurated the
state-of-the-art facility at Ahmednagar in Maharashtra on 21st December, to manufacture
next generation smart Motors.
This is the 7th manufacturing facility of the company in Ahmednagar which is spread over an
area of 4200 sq. mtr. and is equipped with latest world class equipment and machineries.
The new facility will manufacture Smart Electric Motors from 75 kW to 1000 kW. It will cater
to the increased demand of domestic and global market and will help CG to gain greater
market share for higher range of LV Motors.
Speaking on the occasion Chairman- Mr. Vellayan Subbiah said, “The new plant is a
testimony of the company’s commitment towards Make in India initiative and deliver to its
customers world class products at affordable price. This plant will keep India ahead of the
curve in Motor technology.
Tube Investments of India Ltd (TII) has diversified into the electronics components space by picking up 76% stake in Moshine Electronics Private Ltd (MEPL), a manufacturer of camera modules for mobile phones, in an all-cash deal for ₹8.64 crore.
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The three-year-old MEPL had reported a revenue of ₹21 crore in FY21
Forays into CDMO business and APIs. Their rationale is diversification of revenue streams and reducing dependency on traditional lines of business.
Will invest 285 Crore in setting up a subsidiary and identified Mr. N. Govindarajan as the CEO candidate for his rich experience in setting up CDMO businesses.
Gestation period is high in this line of business, especially CDMO. So, I hope they will not become overly aggressive.
Tube Investment seems like staying true to its name by incubating new lines of business. Given Chola group’s experience in creating successful franchises in different lines of businesses, I am personally not much worried that they will spread themselves too thin.
Disc: Invested since long. No recent transactions.
Also the partner N Govindrajan comes with tons of experience since was earlier CEO of AUROBINDO Pharma and TUBE INVESTMENTS might prowl on opportunities like SUVEN PHARMA’s CDMO business came up for sale last year,as part of their inorganic growth strategy.(CG POWER and SHANTI gears bought ,as in listed place )
Dont agree with this de-worsification in my books when the EV wave which fundamentally changes the way Auto & Engineering landscape is fast changing , is staring them right in the middle & during such an imp. transition time in the Biz cycle the co. thought it prudent to venture into highly complex space of CDMO . I would love to hear mgmt views on the rationale which from the looks of it doesnt inspire any confidence . Mgmt bandwidth is always stretched if you try to get into any unrelated biz & this is a classic example of that .
Will be watching the co. closely in the coming Qtrs to see what shape this venture takes but my first impression is negative for the co. !
I would’ve preferred if this was done with Murugappa Group’s own capital as a separate investment rather than use TII capital.
That said it is a fairly small amount ~300cr against 52k cr market cap. And I expect thousands of crores of investments over the next decade or so for this to be a tangible value creator. I’m willing to give the Murugappa Group a pass since they’ve proven to be responsible stewards of capital across many different businesses over decades.
MCap is at market’s mercy. Investment needs to be seen from perspective of cashflows unless they are diluting equity at current mcap to fund this investment.
EID parry may have been best vehicle for this investment in the group.
