World Bank arm IFC is providing long-term finance to ChrysCapital-backed auto-component maker JMT Auto Ltd to support its capex plan, according to an IFC disclosure.
JMT Auto plans an expansion and debottlenecking programme at its existing component manufacturing, forging and foundry operations facilities in Jamshedpur. The project will include installation of a cold forging line that will help reduce scrap rates and provide better mechanical properties to end-products. The project also intends to ramp up the company’s heat treatment and CNC machining capacity.
Total project cost is estimated to be around $20 million and it is expected to provide direct employment opportunities for 250 people or so. IFC will be providing long-term financing to support the capex plan.
Set up in 1987, JMT Auto (Formerly known as Jamshedpur Metal Treat) manufacturers high precision gear box, engine and axle components for medium and heavy commercial vehicles. It is a key components supplier to Tata Motors’ Jamshedpur plant while other domestic clients include BEML, Cummins India, Telcon, L&T Komatsu, Caterpillar India, TAFE and Timken India. The company is also exporting to global clients such as Caterpillar USA, CNH, Cummins USA, Eaton and General Motors.
Currently, the firm has four machining and heat treatment plants, a hot forging shop and a foundry in Jamshedpur. It also has two facilities in Dharwad (Karnataka) and Lucknow (Uttar Pradesh).
The company’s MD Rajeev Singh Dugal and his associates hold 51.05 per cent stake while ChrysCapital owns 30.48 per cent and the balance is held by the public and other institutions.
The IFC loan will provide the necessary financial flexibility to the company which is especially relevant under the current economic environment.
(Edited by Sanghamitra Mandal)