Sintercom India will invest Rs 30 crore as capital expenditure over the next three years, which will be funded from the proceeds of the initial public offering (IPO) launched in early February.
The Pune-based company had raised Rs 56.5 crore through the IPO.
The SME firm is engaged in manufacturing sintered metal auto components for engines, transmission system, body chassis and exhaust applications. Its products include drivetrain gears, engine sprockets, pulleys, cranckshaft-bearing journals and transmission gears to name a few.
“We have a current capacity of 3600 MTPA and are spending Rs 17 crore for expanding the unit which is at Talegoan, Pune,” said Jignesh Raval, Managing Director of Sintercom India.
A further Rs 11.5 crore will be used for part repayment of secured and unsecured loans availed by the company. About Rs 3 crore would be used to fund working capital requirements of the company.
Currently, Sintercom caters to original equipment makers (OEMs) like Maruti Suzuki, Mahindra Mahindra, Bajaj Auto and Fiat India Automobiles. It is vying for businesses from Hyundai, Toyota, Kia and Hero Motocorp.
“We have an in-house dedicated research development team and have been developing new products in engines, transmission systems and body chassis for OEMs and Tier-1 customers,” added Raval.
Presently, car market leader Maruti Suzuki commands a share of 50 percent in Sintercom’s total revenue followed by Mahindra at 29 percent.
The main product line of the company is manufacturing of high strength structural sintered components of engine and transmissions.
The company is focused on the sintering process, which is a metal forming process used for mass production of components via the compacting technology. This results in a solid mass of powder-formed raw material by heat or pressure without melting the material to the point of liquefaction.
As of the last financial year, the company clocked revenues of Rs 65 crore which grew exponentially from Rs 12.3 crore recorded in 2012. Operating margin, as per the company, was “relatively stable” at 17-21 percent over the past few years.