Azad Engineering to invest Rs 1,200-1,500 crore in Telangana

Hyderabad: Hyderabad-based Azad Engineering is planning to invest Rs 1,200-1,500 crore in Telangana over the next few years to ramp up its manufacturing and enhance its capabilities. The company will explore an equity route to fund this expansion to primarily cater to energy, aerospace, heavy machining and oil & gas original equipment manufacturers (OEMs) globally. […]

Hyderabad: Hyderabad-based Azad Engineering is planning to invest Rs 1,200-1,500 crore in Telangana over the next few years to ramp up its manufacturing and enhance its capabilities. The company will explore an equity route to fund this expansion to primarily cater to energy, aerospace, heavy machining and oil & gas original equipment manufacturers (OEMs) globally.

With the addition of new facilities in the State, the company will expand its team strength from 800 now to over 2,200, by adding 1,400 new jobs.

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As part of this expansion, the company is setting up its third manufacturing facility and centre of excellence (CoE) at Tunki Bollaram, Medchal, Malkajgiri District of Telangana. This facility will add 1,000 new jobs. The company laid the foundation stone at the site on Monday and plans to invest over Rs 500 crore for this facility over the next three years, spanning an area of 23.45 acres, in two phases.

Rakesh Chopdar, MD, Azad Engineering said, “Setting up this third plant is part of our strategic initiative to significantly scale up our manufacturing operations by investing in a world-class, Industry 4.0 lean manufacturing facility to cater to the demand of our esteemed global clientele. By August 2022, the shop floor will be ready, machines will be procured and the complete building will be complete by December 2022.”

This facility will create a one-of-its-kind precision manufacturing ecosystem, which will feature uber-smart, lean and modern shop floors with most advanced manufacturing technology and will showcase futuristic technologies such as industrial artificial intelligence, robotics, digitisation, lean etc. It will go for IGBC Gold Rated Green Building certification for this plant.

The construction of the first phase of 30,000 sq meters will be completed by July 2022. The facility will be operational by Q2FY23 and will manufacture and export super critical components for OEMs in the aviation and power generation industry such as GE, Mitsubishi, Siemens, Toshiba, MAN, Doosan Skoda, GE Aviation, Boeing, Honeywell, Eaton, Rafael, BHEL, HAL, Baker Hughes among others.

Rapid ramp-up

Chopdar informed, “Azad Engineering will set up another facility in Dundigal to cater to defence and oil & gas OEMs, after the first phase of the third facility is completed. The Dundigal unit will attract about Rs 500-700 crore investment and generate 400 jobs. In March 2022 Defexpo, we will showcase Azad’s capabilities in the defence sector. Defence remains a massive sector for us.”

The company expects to see rapid ramp-up in the top line with each of its clients, given the qualification process is already completed and all the contracts are in place. Azad expects the US to be a key market for aviation and global markets for the energy sector. The company has been operating in niche areas. For instance, the company makes critical aircraft engine components.

The company which has a turnover of Rs 210 crore is aiming to touch Rs 500 crore in FY24. The company has an order book of Rs 2,000 crore this year. “We are all set to grow a CAGR of over 50-70 per cent over the next five years from 15-20 per cent now,” he added.

Azad Engineering will evaluate options to tap private equity or go for IPO in the next 6-8 months to raise over Rs 1,000 crore to meet its growth needs. The company raised $20 million (about Rs 145 crore) in June 2021 from DMI Finance (a NBFC).

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