IFC Invests Rs 240 Crore In JK Tyre For 5.6 Per Cent Stake, Investment To Help Bolster Company's Expansion Plans

JK Tyre on Wednesday (22 March) announced that International Finance Corporation (IFC) will invest around Rs 240 crore (~$34 million) in the company.

IFC, a member of the World Bank Group, advances economic development in developing countries by encouraging the growth of the private sector.

"IFC’s $30 million (about INR 240 crore) investment in JK Tyre and Industries will part-finance the expansion of manufacturing capacities and integrate advanced, resource-efficient technologies in the production of commercial and passenger car radial tyres which have better safety and longevity," the company said in a statement.

IFC will hold 5.6 percent stake in the tyre major through issue of compulsorily convertible debentures (CCDs) on preferential basis, it added.

The automobile industry is witnessing huge tailwinds on the back of the government’s push towards infrastructure development, higher GDP growth and large allocation of funds towards capital expenditure in India. Improved vehicle utilisation, due to last mile connectivity and vehicle scrappage policy, is leading to a cyclical uptrend in the automobile and tyre industry.

The automotive industry accounts for almost 49 percent of India’s manufacturing GDP, with tyre manufacturers contributing to 2 percent, and demand is expected to grow further, the statement said.

Dr Raghupati Singhania, chairman and managing director JK Tyre & Industries Ltd said, “This investment will be utilised for the expansion of projects, which are not only growth oriented but are also committed to promote sustainable development and enhancing societal value creation. Innovation and technology are at the core of each of our products, which keeps us ahead of the curve to meet the needs of our customers.”

Wendy Werner, India Country Head at IFC said, “Our partnership with JK Tyre & Industries will drive their capacity expansion and scaled manufacturing of energy-efficient tyres through resource-efficient tech, low-carbon solutions, and circularity".